GLOBAL financial markets rallied sharply on Monday after signs emerged that the United States and Iran could be nearing a diplomatic agreement to de-escalate the conflict that has disrupted global energy supplies and shaken international markets for months.
The BBC reported on Monday that oil prices fell steeply while Asian equities surged amid growing expectations that a deal could soon reopen the strategically vital Strait of Hormuz, the world’s most critical energy shipping corridor.
Brent crude, the global benchmark, dropped 5.5 per cent to US$97.90 per barrel during Asian trading, while US West Texas Intermediate crude fell 5.9 per cent to US$90.93.
At the same time, Japan’s benchmark Nikkei 225 index climbed more than three per cent, surpassing the 65,000-point mark for the first time as investors responded positively to hopes of stabilised energy flows from the Gulf region.
The sharp market reaction followed comments by US President Donald Trump, who said over the weekend that a peace arrangement with Tehran had been “largely negotiated”.
Trump also suggested the agreement would involve reopening the Strait of Hormuz, although he stopped short of disclosing specific details.
The narrow maritime passage, through which nearly one-fifth of the world’s oil and liquefied natural gas shipments typically transit, has effectively remained closed since hostilities erupted on 28 February.
Asian economies heavily dependent on Gulf energy imports, particularly Japan and South Korea, have faced mounting pressure from soaring fuel costs and supply disruptions during the conflict.
On Saturday, Trump revealed he had held what he described as a “very good call” with leaders from Saudi Arabia, the United Arab Emirates and Qatar regarding a “Memorandum of Understanding pertaining to PEACE”.
“An agreement has been largely negotiated, subject to finalization between the United States of America, the Islamic Republic of Iran, and the various other Countries, as listed,” Trump wrote on social media.
“Final aspects and details of the deal are currently being discussed, and will be announced shortly.”
Trump also disclosed that he had spoken with Israeli Prime Minister Benjamin Netanyahu, adding that the conversation “went very well”.
Despite the optimism, the US president later urged caution, warning negotiators against moving too quickly.
“Both sides must take their time and get it right. There can be no mistakes!” he wrote on Truth Social on Sunday.
Trump has repeatedly insisted that any agreement with Tehran must ensure Iran is permanently prevented from obtaining nuclear weapons capabilities.
Iranian Foreign Ministry spokesman Esmaeil Baqaei acknowledged that negotiations had intensified over the past week and said the positions of Washington and Tehran had moved closer together.
However, he cautioned that major disagreements remained unresolved.
He also accused the United States of issuing “contradictory statements” throughout the negotiations, suggesting that significant diplomatic hurdles still remained before any final settlement could be reached.
The prospect of a breakthrough agreement has eased immediate fears of prolonged disruption to global energy supplies, although investors remain cautious pending formal confirmation of any ceasefire or maritime reopening arrangement. - May 25, 2026
