Global markets reacted with optimism following the announcement of a framework deal between the United States and Iran, a move President Donald Trump confirmed would lead to the reopening of the vital Strait of Hormuz.
The news triggered a sharp decline in Brent crude, which dropped over 5% to $82.84 per barrel, while Asian and European stock markets saw significant gains. The waterway, a critical artery for 20% of the world's oil and LNG, had been effectively shuttered since the U.S. and Israel launched strikes against Iranian targets on February 28.
While Iran's deputy foreign minister, Kazem Gharibabadi, confirmed the finalization of the deal, analysts remain cautious about the timeline for normalization. Experts like Admiral Mark Montgomery and consultant Andrew Lipow noted that the process is far from instantaneous.
Clearing mines from the strait and clearing the massive backlog of waiting tankers could take anywhere from several weeks to six months. Despite the immediate market relief, the logistical reality of restoring oil flow to pre-war levels means the volatility that characterized the conflict may persist in the short term.
A formal signing ceremony is scheduled for June 19 in Switzerland, with Pakistan credited for its role in mediating the agreement.
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