The United States and Iran have reached an agreement to end their war and reopen the Strait of Hormuz, US President Donald Trump announced on Sunday, triggering an immediate and sharp fall in global oil prices and a surge across Asian stock markets.
Trump confirmed the deal in a social media post, stating he had authorised the toll-free reopening of the Strait of Hormuz and the immediate removal of the US naval blockade of Iranian ports. Iran's Supreme National Security Council and Deputy Foreign Minister Kazem Gharibabadi subsequently confirmed the agreement from Tehran's side.
Pakistani Prime Minister Shehbaz Sharif, whose government played a key role in brokering the deal, said an official signing ceremony would take place in Switzerland on Friday.
Terms of the Agreement
Specific details of the deal have not been fully confirmed by either government. However, Iranian news agency Mehr reported that the agreement includes an immediate cessation of hostilities on all fronts, including in Lebanon, the suspension of sanctions on Iranian oil sales, and the release of approximately $24 billion in frozen Iranian assets. UN Secretary-General António Guterres described the deal as a "peace agreement" that would result in a "permanent ceasefire."
Global financial markets responded immediately. US crude oil fell more than 4.5 per cent to $80 per barrel, its lowest level since early March, while Brent crude dropped approximately 4 per cent to $83 per barrel. Despite the sharp decline, both benchmarks remain significantly elevated: oil prices have risen more than 20 per cent since the war began and more than 40 per cent since the start of 2026.
Asian equity markets surged on Monday morning following the announcement. Japan's Nikkei 225 climbed 5.5 per cent in early trading, while South Korea's Kospi jumped as much as 5.7 per cent.
The US-Iran conflict began in February 2026 and led to the closure of the Strait of Hormuz, through which about 20% of global oil supplies pass, disrupting energy markets worldwide. Although a temporary ceasefire was reached in April, fighting continued sporadically. Sunday's announcement marks the first comprehensive agreement between the two sides since the war began.
