Crude Oil Prices Fall After US–Iran Peace Deal Reopens Strait of Hormuz | Global Markets Rally

Global oil prices fell sharply on Monday while stock markets surged after the United States and Iran announced a landmark peace deal aimed at ending months of conflict and reopening the Strait of Hormuz, one of the world’s most critical energy shipping routes.

The agreement, confirmed after mediation efforts led by Pakistan, is expected to be formally signed in Switzerland on June 19. It marks the end of a three-month conflict that disrupted global energy flows and triggered fears of rising inflation and economic instability. The Strait of Hormuz, which handles nearly 20% of global crude oil shipments, had been effectively closed during the tensions.

Following the announcement, crude oil prices dropped by as much as five percent, with West Texas Intermediate trading around $83.30 per barrel. Prices had previously surged above $110 at the height of the conflict, when supply fears rattled global energy markets.

The easing of tensions immediately boosted investor sentiment across global financial markets. Asian equities led the rally, with Japan’s Nikkei and South Korea’s stock market both jumping about five percent. European markets also opened higher, while currencies and bond yields adjusted as traders priced in reduced inflation risks.

Analysts say the deal has shifted global markets from “war-risk pricing” to “reopening optimism,” easing pressure on inflation and central bank rate expectations. However, some experts caution that the agreement still needs to be finalized and tested on the ground, with concerns remaining over long-term stability in the region.

source: punch