Global oil prices plummeted and stock markets surged Monday as a US-Iran peace deal raised hopes of ending the worst energy supply crisis in market history. Brent crude dropped 4% to below $84 a barrel in Asia-Pacific trading on optimism that the Strait of Hormuz could reopen soon, restoring Gulf oil exports. President Donald Trump posted 'Let the oil flow' on social media, signaling the administration's embrace of the diplomatic breakthrough.
The deal's immediate impact would be to relieve severe supply constraints that have roiled global energy markets. Reopening the Strait of Hormuz — a chokepoint for nearly a fifth of the world's petroleum — could bring millions of barrels per day back online, stabilizing prices and easing inflationary pressures on consumers and businesses worldwide.
Political dynamics remain fluid. The Trump administration has touted the agreement as a foreign policy victory after months of escalating tensions with Iran. Democratic leaders, while cautious, have indicated they will review the deal's terms before offering full support, highlighting potential concessions that could weaken US leverage in the region.
Investor sentiment has turned sharply bullish, with equity benchmarks across Asia-Pacific posting gains. The energy sector, however, faces headwinds as lower crude prices squeeze producer margins. Analysts warn that unless the reopening is swift and complete, volatility could persist — if diplomacy stalls, prices may spike again.
Yet the accord's durability is untested. Skeptics note prior US-Iran negotiations have collapsed amid mutual distrust and hardliner opposition on both sides. If implementation falters or Iranian compliance wavers, the supply crisis could deepen rather than resolve.