Asian stock markets shot up Monday after news of a new framework to end the U.S.-Iran conflict . Japan's Nikkei 225 index soared 5.5%,while South Korea's Kospi surged 5.7% in morning trades. Taiwan's Taiex rose 2.7%. Over in Australia,ASX200 gained about 1.5%. In Hong Kong,Hang Seng Index started up 1% before giving back some gains later.
U.S. stock futures looked upbeat too. Contracts linked to S&P 500 and tech-heavy Nasdaq Composite climbed 1% and 1.8%. Oil prices dropped sharply,with Brent crude falling around 4.5% below $83.40 per barrel. Analysts say this could ease inflation worries for central banks.
On Sunday, President Donald Trump took to social media to announce a deal with Iran. He said this would allow toll-free reopening of Strait of Hormuz and lift U.S . naval blockade on Iranian ports . Trump urged,“Ships of the World, start your engines . Let the oil flow!”
Iran's Supreme National Security Council confirmed a memorandum of understanding was complete. Pakistani Prime Minister Shehbaz Sharif said signing ceremony set for Friday in Switzerland. Details still murky,but Iranian news agency Mehr reported immediate stop to hostilities on multiple fronts,suspension of sanctions on Iranian oil,release of $24 billion in frozen assets.
If deal goes through, shipping in Strait of Hormuz could return to normal. It's been nearly four months of disruptions from Iranian threats and U.S. naval actions. Blockage led to daily shortfall of about 14 million barrels,pushing up global energy prices and causing fuel shortages .
Despite markets' optimism, experts warn it might take months before energy flows get back to normal. Chris Wright, U.S. Secretary of Energy, said restoring energy supplies could be long haul . Svein Ringbakken,from Norwegian Shipowners’ Mutual War Risks Insurance Association,noted thousands of vessels still trapped in Gulf,adding to complications.
“Even at full capacity,this would take months to restore to normal,” Ringbakken said. He pointed out logistical challenges like damage to production facilities and port infrastructure causing supply chain inefficiencies .
SV Anchan, chairman of U.S.-based Safesea Group,doubted deal’s execution, stressing uncertainty over naval mines removal and underwriters' responses. “It’s hard to trust anything,” he remarked,hinting that peace deal might not match ground realities .
As markets digest these developments, traders and analysts will keep a close eye on situation in coming days. What will really unfold…
