Asian stock markets opened strongly on Monday, and oil prices moved lower after US President Donald Trump announced a framework agreement with Iran that he said would end hostilities and restore shipping through the Strait of Hormuz.
Investor sentiment improved across the region amid expectations that the reopening of one of the world’s most important energy corridors could ease concerns over global oil supplies and reduce pressure on energy markets.
In Japan, the benchmark Nikkei index rose more than 4 per cent during intraday trade, according to Kyodo News, touching a record high.
South Korea’s Kospi also posted strong gains, rising 4.3 per cent in early trade as markets reacted positively to the development.
Australian shares joined the rally. The ASX200 was up 125 points, or 1.4 per cent, at 8,928. Materials stocks led gains, with the sector advancing 3.5 per cent.
Oil prices, which had remained elevated during the prolonged tensions, fell sharply.
According to CNBC, US crude oil futures for July delivery declined 4.77 per cent to USD 80.83 a barrel. Brent crude futures for August delivery dropped about 4 per cent to USD 83.77 a barrel.
Other market indicators also reflected improving risk appetite. US crude was reported at USD 81.23 per barrel after falling 4.3 per cent. S&P 500 futures gained 0.8 per cent, while Nasdaq futures advanced 1.4 per cent. Nikkei futures climbed to 68,685, significantly above Friday’s cash close of 66,020.
Trump announces deal, reopening of Strait of Hormuz
In a post on Truth Social, Trump said an agreement with Iran had been completed and announced the reopening of the Strait of Hormuz.
“The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorise the toll-free opening of the Strait of Hormuz, and, simultaneously herewith, authorise the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!” Trump wrote.
The Strait of Hormuz is a crucial maritime route for global energy exports and has been at the centre of concerns over oil supply disruptions during the crisis.
Iran says formal signing planned this week
Iranian Deputy Foreign Minister for Legal and International Affairs Kazem Gharibabadi also confirmed the agreement and said Tehran would participate in a proposed 60-day negotiation period aimed at securing a final arrangement.
According to Iran’s state-affiliated Press TV, Gharibabadi said Iran would first verify Washington’s commitments on ending hostilities, lifting the blockade and releasing Iranian assets.
He added that the official signing ceremony is scheduled for Friday, after which the memorandum of understanding will be made public.
“The memorandum of understanding was not just a product of diplomacy, but is indebted to Iran’s military achievements. It is indebted to the pure blood of the martyrs we gave in confronting the enemies of the establishment. After the official signing, the text of the memorandum of understanding will be published. On Friday, we will have an official signing, and the heads of the two delegations will hold discussions to determine the future arrangements for negotiations,” Gharibabadi said.
The reported agreement comes after 108 days of tensions that had weighed on energy markets and raised concerns about disruptions to global oil supplies moving through the Strait of Hormuz.