- Trump said the strait would be “completely open” by Friday.
- Iranian media say five ships passed through the US blockade.
- Trump, Vance and top Iranian negotiator sign text electronically.
Stocks were mostly higher on Tuesday and oil prices held on to their losses following the previous day’s euphoric rally sparked by the US-Iran peace deal that will reopen the crucial Strait of Hormuz.
Eyes are now on developments ahead of Friday’s signing ceremony in Switzerland, which will end more than three months of a war that sent shockwaves through energy markets and sent global inflation soaring.
US President Donald Trump said ships were crossing the strait again and it would be “fully open” by Friday, while Iranian media said three oil tankers and two cargo ships had passed through the area under a US naval blockade.
Tehran blocked the waterway after the United States and Israel launched their war against Iran on February 28. The United States then blocked shipments to and from Iranian ports.
A senior US administration official, however, said Trump, Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf had already signed the text electronically.
“Investors are increasingly pricing in a lasting improvement in the geopolitical context,” wrote Fiona Cincotta of City Index.
“However, with several details still to be finalized, any setbacks could trigger a strong market reaction. For now, confidence is growing in the reopening of the Strait of Hormuz and the normalization of energy supplies.”
She added that “the key question is not whether a deal will be reached, but how quickly oil exports and production can recover.”
“Investors will also monitor compliance with the agreement and the pace of supply normalization,” she added.
Oil industry observers warn that market conditions will likely be tight for several weeks or months. New data from the US Department of Energy showed that strategic oil stocks fell last week to their lowest level since 1983.
Shipping groups warned Monday that it was too early to safely resume shipping.
The deal sparked a huge rebound in global stocks, with the Dow on Wall Street hitting a record high, while crude prices plunged nearly five percent.
Optimism remained largely intact Tuesday, with the two major crude contracts barely moving and inventories mostly rising.
Seoul once again dominated the gains, jumping more than 1% – a day after piling on more than 5% – helped by further advances in the technology sector.
This follows another blockbuster day for Elon Musk’s SpaceX, which surged nearly 20% for the second day in a row following its listing on Monday.
Shanghai, Singapore, Taipei, Wellington and Manila also increased, although Tokyo, Hong Kong and Sydney saw declines.
There was little reaction to the news that Chinese retail sales declined last month for the first time since 2022.
Investors are closely watching the Bank of Japan’s policy meeting, where it is expected to raise interest rates to their highest level in 31 years later today.
