The United States and Iran have reached a peace agreement including a 60-day ceasefire. The deal mandates the reopening of the Strait of Hormuz. Officials will formally sign the memorandum this Friday in Switzerland.
Crude oil prices fell by more than 4% following the announcement. Brent crude dropped below $84 per barrel.
Equity markets rallied globally on the news. The NIKKEI 225 gained nearly 5%. European and U.S. market futures also showed substantial gains.
Investors anticipate lower oil prices will ease global inflationary pressures. The agreement significantly reduces geopolitical risk in the region.