WASHINGTON: Signs are emerging that the Strait of Hormuz, the world’s most critical oil shipping route, is moving toward full reopening following a reported US-Iran agreement aimed at ending months of conflict in the Middle East.
US President Donald Trump said on Friday that the strategic waterway would be “fully open” by the end of the week, raising hopes of stabilization in global energy markets after the ceasefire deal.
According to Trump, vessels have already begun transiting through the strait, with oil tankers safely passing the region. He later suggested that no major additional security measures would be required to keep the route operational.
The reported agreement between Washington and Tehran, reached after three months of escalating tensions, is being viewed as a major turning point for the global economy. Markets had been shaken following a US-Israeli strike in Iran earlier this year, which significantly increased geopolitical risk in the region.
Following news of the deal, global financial markets reacted positively. The Dow Jones Industrial Average hit record highs, while crude oil prices fell by nearly five percent on expectations of improved supply stability.
Iranian state-linked media reported that several oil tankers and cargo vessels had already begun moving through the disputed maritime corridor on Monday evening. Tehran had previously been accused of disrupting traffic through the strait during the conflict, raising fears of global supply shortages and sharp price spikes.
Meanwhile, reports suggest that the United States, Iran, and mediator Pakistan are preparing to sign a formal peace agreement in Switzerland on Friday, although some US officials claim electronic signatures have already been exchanged.
US Vice President JD Vance said no American taxpayer money would be used as part of the deal, describing it as a diplomatic breakthrough. He also indicated cooperation with the International Atomic Energy Agency (IAEA) on managing Iran’s enriched uranium stockpile.
Iranian officials have described the agreement as an “immediate end to war.” Deputy Foreign Minister Kazem Gharibabadi said further talks will be held within two months to finalize a comprehensive deal.
Iran’s military has framed the development as a victory, claiming the United States was “humiliated,” while President Masoud Pezeshkian called it a major regional achievement.
However, Iranian Foreign Minister Abbas Araghchi urged caution, citing past failures in implementing similar agreements and warning that trust remains limited.
Key details of the deal remain unclear. Tehran is reportedly seeking the return of frozen overseas funds and compensation for wartime damages, while US officials are said to be considering the unfreezing of assets worth around $12 billion.
Vance clarified that no US funds are being transferred to Iran, stressing strict oversight of sensitive financial arrangements. Discussions are also reportedly ongoing regarding possible international inspections of Iran’s nuclear facilities.
Analysts say the reopening of the Strait of Hormuz and the potential peace agreement could bring temporary stability to global energy markets, although political tensions, regional security risks, and nuclear disagreements remain unresolved.
Reactions within Iran have been mixed, with some citizens hopeful for a return to normal life, while others remain skeptical about long-term stability.
The development is also expected to have wider regional implications, particularly in relation to ongoing tensions involving Israel, Lebanon, and Gaza.
International observers have welcomed the easing of tensions, saying improved oil flow through Hormuz could help stabilize global energy supply and reduce economic uncertainty.
Comment