In a move that boosted stock markets and caused oil prices to drop, President Donald Trump announced a potential end to hostilities with Iran, contingent upon Tehran agreeing to a deal with Washington. Trump took to social media to express that if Iran complies with the terms already discussed, the conflict, referred to as “Epic Fury,” would conclude, and the strategically crucial Strait of Hormuz would be accessible to all countries, including Iran. However, he issued a stern warning that failure to reach an agreement would result in intensified military actions.
Trump’s remarks came as he announced a temporary halt to the “Project Freedom” operation, which has been escorting ships through the Strait of Hormuz—a vital corridor for global oil that Iran has blockaded since February, leading to an international energy crisis. The pause in military operations aims to facilitate negotiations with Tehran, though the blockade on Iranian ports remains. In response, Iran’s Revolutionary Guards’ Navy indicated that safe passage through the strait would be assured with the cessation of U.S. threats, although specifics on the new procedures were not disclosed.
The prospect of de-escalation initially sent Brent crude oil prices, which had surged by as much as 6% earlier in the week due to Middle Eastern tensions, plummeting by 11% to $97 per barrel—marking the first dip below $100 since April 22. This news was further compounded by reports suggesting that the White House was nearing a one-page memorandum of understanding with Iran to end the conflict, setting the stage for more comprehensive nuclear discussions. Despite this, oil prices later rebounded slightly, ending the day with a 7.3% decline at $101.83 per barrel, as Iranian officials dismissed the potential agreement as merely an “American wishlist.”
The situation had previously driven oil prices to $126 per barrel, a peak not seen since 2022, amid fears of a prolonged U.S. blockade of Iranian ports and stalled peace negotiations. The anticipation of a resolution had a positive impact on European stock markets, with significant gains observed across indices. The UK’s FTSE 100 rose by 2%, France’s Cac 40 by 3%, and Germany’s Dax by 2.1%. Global markets mirrored this optimism, with MSCI’s All-Country World Index reaching a new high, along with similar records in emerging markets and Asia Pacific shares outside Japan rising by 2.5%.