The United States and Iran announced a deal on Sunday, June 14, to end more than three months of war and reopen the Strait of Hormuz — but energy experts warned that high oil prices and supply shortages will persist for months, even as global stock markets surged on the news. President Donald Trump declared the Strait open in a post on Truth Social and said the US naval blockade of Iranian ports would be lifted immediately. Iran’s Supreme National Security Council confirmed the agreement the same day.
Markets reacted swiftly. Japan’s Nikkei 225 jumped 5.5 percent in Monday morning trading, South Korea’s Kospi climbed as much as 5.7 percent, and futures tied to the S&P 500 and the Nasdaq Composite rose roughly 1 percent and 1.8 percent respectively, Al Jazeera reported. Brent crude, the global oil benchmark, fell more than 4 percent — dropping $3.45 to $83.89 per barrel, according to AP. US benchmark crude lost $4.03 to settle at $80.85 per barrel.
Those prices, however, remain well above the roughly $70 per barrel where oil was trading before the war began in late February.
The relief in markets does not translate directly into relief at the pump, energy analysts said. The process of getting oil from the Persian Gulf to global consumers — loading tankers, traveling through the strait, reaching refineries, and finally arriving at its destination — is slow by nature and was severely disrupted during more than three months of conflict.
“It’s going to take time for people to feel comfortable and for insurance to be in place — particularly to get people on the ground to restart some of these assets,” Daniel Evans, global head of fuels and refining research at S&P Global Energy, told AP.
Ships loaded with crude oil have been stranded in the Persian Gulf since the conflict began, unable to safely travel through the waterway, through which about a fifth of the world’s oil and gasoline supplies typically traveled before the war began. Before those tankers can exit, new vessels must enter to collect fresh cargo — and operators will not risk sending ships through until they are confident the security situation is stable. Evans told AP that to bring a ship in, operators need to be sure there is a large enough window of safety to load and move it out.
Some producers in the region compounded the problem by pausing extraction entirely after running out of storage capacity. Restarting that shut-in production is itself a time-consuming process, AP reported.
Alan Gelder, senior vice president of refining, chemicals and oil markets at the analytics firm Wood Mackenzie, said the recovery timeline will vary sharply by country. Countries such as Saudi Arabia and the United Arab Emirates, which have alternative pipelines and export routes that bypass the Strait of Hormuz, are positioned to resume operations more quickly. Iraq faces a longer road. “Places like Iraq could be much more challenged because they’ve had a much bigger shut-in, their fields are more difficult… it may well take about a year before they get back,” Gelder told AP.
Investment in energy infrastructure, which already takes years to yield results under normal conditions, ground to a halt during the closure of the strait, Gelder said. That capital freeze will further slow any recovery.
Daniel Sternoff, a senior fellow at the Center on Global Energy Policy at Columbia University, told AP that oil producers shut in during the conflict will not restart until they have confidence in a stable, durable reopening of the strait — not a temporary one. “We don’t know what open means or what the speed of evacuation of trapped material is going to be,” he said.
The deal itself was brokered with Pakistan’s help. Pakistani Prime Minister Shehbaz Sharif, whose government mediated between Washington and Tehran, said a formal signing ceremony will take place in Switzerland on June 19, Al Jazeera reported. Iran’s Deputy Foreign Minister Kazem Gharibabadi confirmed that both sides had finalised the wording of a memorandum of understanding. Iranian state news agency Mehr reported the agreement includes an immediate halt to hostilities on all fronts — including in Lebanon — the suspension of sanctions on Iranian oil sales, and the release of $24 billion in frozen Iranian assets, though those terms have not been officially confirmed by Washington.
Trump’s post on Truth Social announcing the deal read: “Ships of the World, start your engines. Let the oil flow!”
Khoon Goh, head of Asia research at the bank ANZ, told Al Jazeera the market reaction reflected both the announcement and growing expectations in the days before it. “The fall in oil prices will provide some relief for central banks around the world who were worried about the inflation outlook,” Goh said. He added that attention now turns to the US Federal Reserve, which is scheduled to decide on interest rates this week.
Background
The 2026 Iran war was initiated by the United States and Israel on February 28, 2026. The opening salvo took out Supreme Leader Ali Khamenei and triggered retaliatory missiles and drones from Iran across the region. The danger of crossfire and threats from Iran led to severe disruption of traffic through the Strait of Hormuz, causing fuel shortages in parts of Asia and rippling effects across the global economy. After more than five weeks of fighting, the US and Iran agreed on April 7–8 to a ceasefire. In the following weeks, the conflict shifted to a game of brinkmanship over restricted access to the strait. The disruption has squeezed supplies of oil, gas, and other commodities, pushing prices far higher than before the war.
What Happens Next
Pakistan’s Prime Minister Sharif confirmed that a formal signing of the memorandum of understanding will take place in Switzerland on June 19, Al Jazeera reported. The deal is intended to bring the conflict to a formal end within 60 days of signing, according to Britannica’s summary of events. The US Federal Reserve is scheduled to decide on interest rates this week, a decision that Khoon Goh of ANZ said will be closely watched given the war’s inflationary impact. Energy markets will also track whether tanker insurers restore coverage for Strait of Hormuz transits — a prerequisite, according to S&P Global’s Daniel Evans, before shipping volumes can meaningfully recover. Iraq’s oil sector, which analysts say faces the steepest restart challenge, could take up to a year to return to pre-war output levels, according to Wood Mackenzie.
