By Promise Bassey
US-Iran Peace Deal Framework Sparks Market Relief, But Israel Pushes Back
A draft memorandum between Washington and Tehran has become the biggest market-moving story out of the Gulf this week, raising hopes of de-escalation even as regional allies signal reservations.
What’s in the draft deal
Under terms both sides have confirmed, Iran would “immediately reopen the Strait of Hormuz to all commercial vessels” once the memorandum is signed. In return, the U.S. would lift its naval blockade on Iranian ports. The deal also outlines steps on Iran’s nuclear program, with the UK, France, Germany and Italy saying they’re prepared to lift sanctions if Tehran complies.
Read more: Trump Hosts White House Cage Fight for 80th Birthday
UN Secretary-General Antonio Guterres called it a “critical step towards the peaceful settlement of the conflict”.
Market reaction: Oil down, stocks up
News of the potential reopening of Hormuz, a chokepoint for roughly 20% of the world’s oil, sent energy prices lower. Brent crude fell 4-5% to $83.30 a barrel and WTI dropped to $80.48. Analysts say reopening the strait would ease freight costs and inflation pressure for major importers like India.
Read more: Petrol Prices Jump 40% as US-Iran Conflict Strains Nigeria’s Import Bill, Households Feel the Pinch
Equities rallied on the risk-off reversal. U.S. futures jumped: Dow +452 points, S&P 500 +1.2%, and Nasdaq +2%.
Israel’s immediate response
Not all allies are on board. Israeli Defense Minister Katz said Tel Aviv will not withdraw from Lebanese territory while the interim deal is pending, and intends to remain “indefinitely” in areas it holds in Lebanon, Syria, and Gaza. That stance could complicate efforts to fully normalize shipping and trade routes if the deal moves forward.
Why it matters now
The Hormuz Strait has been a flashpoint since renewed violence between Israel and Lebanon dashed earlier hopes for a reopening. If signed, the memorandum would be the first coordinated U.S.-Iran step on Gulf navigation since the blockade began. But with Israel digging in and attacks on vessels with Indian crew reported off Oman this week, the path from draft to implementation looks uncertain.
