International markets responded positively as President Donald Trump announced a potential end to the conflict with Iran, contingent upon Tehran agreeing to a deal with Washington. Trump suggested that, should Iran comply with previously agreed terms, the ongoing conflict—dubbed “Epic Fury”—would conclude, and the strategic Strait of Hormuz would be reopened to all, including Iranian vessels. This announcement came via social media, where Trump also cautioned that failure to reach an agreement would result in intensified military actions.
The president’s statement followed his decision to temporarily pause “Project Freedom,” a U.S. operation ensuring the safe passage of ships through the Strait of Hormuz, a vital corridor for about 20% of the world’s oil supply. This area has been under an Iranian blockade since February, contributing to a global energy crisis. Despite pausing this operation, Trump maintained that the blockade of Iranian ports would persist. Meanwhile, Iran’s Revolutionary Guards’ Navy responded by asserting that safe transit in the strait would be assured with the cessation of U.S. threats, though specific new procedures were not detailed.
Market reactions to these developments were swift. Brent crude oil prices, which had surged earlier in the week due to Middle Eastern tensions, plummeted by 11% to $97 a barrel—a notable drop below the $100 mark for the first time since April 22. Similarly, wholesale gas prices saw a decline, with the British June contract decreasing by 6.3% to 107.8p per therm. The prospect of resumed international travel buoyed airline stocks, further lifting investor sentiments. Despite initial optimism, oil prices later rebounded slightly, closing at $101.83 a barrel as Iran dismissed the deal as an “American wishlist.”
Stock markets across Europe experienced a surge, with the UK’s FTSE 100 index climbing 2%, France’s Cac 40 increasing by 3%, and Germany’s Dax advancing 2.1%. Globally, MSCI’s All-Country World Index reached a new peak, rising 1.6%, alongside similar gains in its emerging markets benchmark and the Asia Pacific index, excluding Japan, which grew by 2.5%. This market rally was partly fueled by reports suggesting the White House was nearing an agreement with Iran on a memorandum to cease hostilities, which could lay the groundwork for future nuclear discussions.