President Donald Trump and Iran have reached an agreement that includes the reopening of the Strait of Hormuz, triggering a sharp decline in global oil prices.
The deal reduces geopolitical risk in one of the world's most critical maritime chokepoints. Because a significant portion of the world's oil passes through the strait, any threat to its accessibility typically drives prices higher.
Oil prices reversed course on Thursday afternoon, turning from gains to losses following reports that the U.S. and Iran were hours away from announcing terms for peace negotiations [3]. The market reaction intensified as reports emerged that a deal was expected to be signed on Friday, June 14, 2026 [1].
President Donald Trump said an agreement with Iran had been reached [2]. He said the deal, which specifically addresses the reopening of the Strait of Hormuz, was expected to be signed on Sunday [2].
Despite the general market trend, some reports regarding the exact status of the agreement varied. While some outlets reported the deal as reached, others noted that oil prices fell amid disputed reports of a draft memorandum between the U.S. and Iran [3].
Traders responded to the news by lowering oil prices, reflecting a decrease in the perceived risk of supply disruptions in the Persian Gulf [1, 3]. The shift in market sentiment occurred across Thursday and Friday as news of the negotiations spread through global financial hubs [1, 2].
“Oil prices dropped on Sunday after President Donald Trump said an agreement with Iran had been reached.”
The reopening of the Strait of Hormuz removes a primary source of volatility for global energy markets. By stabilizing this transit point, the agreement lowers the 'geopolitical risk premium' that traders add to the price of crude oil, which can lead to lower fuel costs for consumers globally while shifting the diplomatic dynamic between Washington and Tehran.
