The Dow Jones Industrial Average rose 0.7% to 51,202.26 on Monday as the United States and Iran announced a peace deal to end their four-month conflict and reopen the Strait of Hormuz, sending a wave of relief through global markets and crude oil tumbling to three-month lows.
Oil prices fell sharply following the deal announcement. Brent crude, the global benchmark, dropped 4.8% to $83.09 per barrel, while West Texas Intermediate fell 5.2% to $80.45, according to Barron’s. The decline marked the lowest levels for both benchmarks since March 2026, erasing months of war-driven price increases.
The Strait of Hormuz, which normally carries roughly 20% of the world’s crude oil supply, had been effectively closed by Iran after U.S. and Israeli strikes in late February. The blockage created a daily shortfall of about 14 million barrels, according to the International Energy Agency, driving energy prices higher and spurring fuel shortages globally.
President Donald Trump announced the deal’s completion on Sunday, stating the Strait of Hormuz would reopen immediately and toll-free. Pakistani Prime Minister Shehbaz Sharif, who helped broker the agreement, said an official signing ceremony would take place in Switzerland on Friday. Iran’s Supreme National Security Council confirmed the sides had finalized the wording of a “memorandum of understanding.”
Stock markets across the Asia Pacific region surged in response. Japan’s Nikkei 225 soared 5.0% to 69,317.50, while South Korea’s Kospi jumped as much as 5.7%. Taiwan’s Taiex climbed 2.7%, and Australia’s ASX200 rose about 1.5%. U.S. stock futures also climbed, with S&P 500 futures and Nasdaq Composite futures rising about 1% and 1.8%, respectively, according to Al Jazeera.
The deal includes an immediate cessation of hostilities, suspension of sanctions on Iranian oil sales, and the release of $24 billion in frozen Iranian assets, according to Iran’s state news agency Mehr. Analysts noted that while markets had already reacted late last week when Trump indicated a deal was close, actual confirmation spurred a further rally. “The fall in oil prices will provide some relief for central banks around the world who were worried about the inflation outlook,” Khoon Goh, head of Asia research for ANZ, told Al Jazeera.
Despite the optimism, shipping experts cautioned that full normalization would take months. The blockage left thousands of vessels trapped in and around the waterway, and potential Iranian naval mines would need to be cleared before traffic could fully resume. U.S. Secretary of Energy Chris Wright acknowledged it could take “many months” for energy supplies to return to normal, and shipping industry officials warned of logistical challenges that could extend the restoration timeline well beyond the initial 30-day period outlined in the agreement.
Sources
- Barron’s — Dow close at 51,202.26 (+0.7%), oil prices (Brent -4.8% to $83.09, WTI -5.2% to $80.45), Strait of Hormuz details, and global market reactions
- Al Jazeera — Asia-Pacific stock market surges (Nikkei 5.0%, Kospi 5.7%, Taiex 2.7%, ASX200 1.5%), U.S. futures movements, analyst commentary from Khoon Goh (ANZ), and shipping industry concerns
- Reuters — Oil benchmark declines and market movements
- CNBC — Oil price specifics and historical context
