Key Points
- Japan’s Nikkei rises nearly 5%, and South Korea’s Kospi gains over 5%
- Trump confirms deal and announces reopening of Strait of Hormuz
- Iran says agreement marks “immediate end” to hostilities, not final peace settlement
ISLAMABAD: Oil prices tumbled more than four per cent on Monday while Asian stock markets surged in early trade after the United States and Iran announced they had reached an agreement to end the conflict in the Middle East.
At 0045 GMT, US benchmark West Texas Intermediate crude fell 4.70 per cent to $80.89 per barrel
North Sea Brent crude dropped 4.03 per cent to $83.81, as traders rapidly unwound the risk premium built into energy markets during months of geopolitical tension.
In equity markets, Japan’s Nikkei 225 index jumped 4.99 per cent in early trading.
South Korea’s Kospi index soared 5.54 per cent, reflecting strong investor optimism over easing regional instability and expected improvements in global energy supply flows.
The market rally followed confirmation that Pakistan, acting as a mediator, had announced a peace deal between Washington and Tehran, including an “immediate and permanent” end to military operations on all fronts, including Lebanon.
US President Donald Trump confirmed the development, saying, “The Deal with the Islamic Republic of Iran is now complete,” and announced the reopening of the strategic Strait of Hormuz, a vital waterway through which around one-fifth of global crude oil shipments pass.
Trump also stated that the United States would lift its naval blockade and allow free passage through the strait, describing it as a step toward restoring global oil flows and stability in energy markets.
Soon after, Iranian authorities confirmed that the agreement marked an “immediate end” to hostilities, though officials emphasised it was a first-step framework rather than a final peace settlement.
Market analysts said the reaction reflected relief over reduced supply risk, particularly for crude oil, which had been heavily influenced by concerns over disruption in the Strait of Hormuz during the conflict.
“This is a first-step deal, not a final peace settlement,” said Stephen Innes of SPI Asset Management, adding that markets would now focus on verification of implementation, including formal signing, mine clearance operations, and compliance by all parties.
He noted that the agreement effectively postpones deeper political issues, including long-term Iranian compliance and regional security arrangements, to the negotiation phase.
Despite strong gains across equities and falling oil prices, analysts cautioned that the agreement’s durability will depend on implementation over the coming weeks and the outcome of continued diplomatic engagement.
