Oil prices saw a decline, while stock markets experienced an upswing following comments from Donald Trump indicating that the conflict with Iran could come to an end and that the Strait of Hormuz would be accessible to all if Tehran reached an agreement with Washington. The U.S. president expressed on social media that if Iran upholds what has been previously agreed upon—though he acknowledged this is a substantial assumption—the well-known “Epic Fury” operation would conclude. Consequently, the blockade would be lifted, allowing the Hormuz Strait to be open to all, including Iran.
Trump cautioned, however, that if Iran failed to negotiate a deal, military actions would commence with increased intensity compared to previous engagements. This announcement followed Trump’s decision to temporarily halt the “Project Freedom” operation, which involved escorting vessels through the strait—a crucial waterway for about 20% of global oil supplies—that Iran has blocked since late February, causing a worldwide energy crisis. The president mentioned that the pause was to finalize negotiations with Tehran, while maintaining the blockade on Iranian ports. Iran’s Revolutionary Guards’ Navy, responding to the U.S. suspension of operations, stated that safe passage through the strait would be ensured and that new procedures would be implemented.
In reaction to these developments, Brent crude oil prices, which had surged by up to 6% earlier in the week due to recent Middle East tensions, plummeted 11% to a low of $97 per barrel, marking its first dip below $100 since April 22. Wholesale gas prices experienced a similar decline, with the British June contract dropping 6.3% to 107.8p a therm. Meanwhile, airline stocks saw gains as prospects for international travel improved. The downward trend in crude prices was accelerated by reports suggesting that the White House was nearing a consensus on a one-page memorandum of understanding to conclude the conflict with Iran. These reports cited multiple sources, including two U.S. officials, indicating that both parties were prepared to establish a framework for more comprehensive nuclear discussions.
Later in the day, oil prices moderated their decline, trading down 7.3% at $101.83 a barrel, after Iran dismissed the developments as an “American wishlist [and] not a reality.” The Revolutionary Guards’ statement did not clarify the specifics of the new procedures but expressed gratitude to shipowners and captains for adhering to Iranian regulations while navigating the waterway. Last week, oil prices had reached $126 per barrel, the highest since 2022, following Trump’s remarks that the U.S. blockade of Iranian ports could persist for months amid stalled peace negotiations.
European stock markets reacted positively, with significant gains recorded across major indices. The UK’s FTSE 100 index rose by 2%, France’s Cac 40 increased by 3%, and Germany’s Dax climbed by 2.1%. Concurrently, MSCI’s All-Country World Index achieved a new record, rising by 1.6%, alongside similar records for its emerging markets benchmark and the broadest index of Asia Pacific shares outside Japan, which rose by 2.5%.