In a recent development, oil prices saw a decline while stock markets experienced an upward surge following statements by Donald Trump indicating that the conflict with Iran could come to an end if Tehran agrees to a deal with Washington. The U.S. President took to social media, suggesting that should Iran consent to previously discussed terms, the ongoing conflict, referred to as “Epic Fury,” would cease, and the Strait of Hormuz would be open to all, including Iran. This strategic waterway, crucial for global oil supply, has been blockaded by Iran since late February, causing a significant energy crisis worldwide.

Trump also warned that if Iran fails to reach an agreement, military actions would resume at a heightened intensity. He announced a temporary halt to “Project Freedom,” the operation aimed at escorting ships through the strait, to allow for negotiation efforts with Tehran. Despite this pause, the blockade on Iranian ports remains in effect. Iran’s Revolutionary Guards’ Navy, in their first response to the U.S. suspension of operations, assured that safe transit through the strait would be maintained with the threat from the U.S. diminishing and new procedures being implemented.

The possibility of easing tensions initially caused Brent crude oil prices, which had surged by 6% earlier due to recent Middle East conflicts, to plummet by 11%, dropping below $100 a barrel for the first time since April 22. Wholesale gas prices also saw a reduction, with the British June contract decreasing by 6.3% to 107.8p a therm, while airline stocks benefited from the improved outlook for international travel. The drop in oil prices accelerated after reports suggested that the White House was nearing a memorandum of understanding with Iran to end the conflict, potentially setting the stage for future nuclear discussions.

However, the oil market adjusted later, with prices recovering slightly to trade at $101.83 a barrel after Iran dismissed the U.S. proposal as merely an “American wishlist” rather than a feasible agreement. The Guards’ statement did not elaborate on what the new procedures would entail, but it expressed gratitude to shipowners and captains for adhering to Iranian regulations while navigating the strait.

Meanwhile, European stock markets responded positively to the developments. The UK’s FTSE 100 index rose by 2%, France’s Cac 40 increased by 3%, and Germany’s Dax was up by 2.1%. Globally, MSCI’s All-Country World Index reached a new record, rising by 1.6%, alongside gains in its emerging markets benchmark and the broadest index of Asia Pacific shares outside Japan, which climbed by 2.5%.