U.S.-Iran Peace Deal Crushes Oil Prices, Asian Stocks Surge with Japan and South Korea Up 5%

The United States and Iran have announced a peace agreement to end their conflict, raising expectations for the reopening of the Strait of Hormuz. The news has relieved global investors, causing international oil prices to plummet and Asian stock markets to surge, with Japan and South Korea closing up over 5%.

The peace deal, mediated by Pakistan, has been confirmed by both parties, with a signing ceremony expected in Switzerland on the 19th, ending over three months of conflict. The war had triggered soaring energy prices and renewed fears of inflation.

The Strait of Hormuz is a critical maritime chokepoint, through which about 20% of the world's crude oil supply passes. Shortly after the U.S. and Israel launched attacks on Iran on February 28, Tehran effectively closed the strait.

After the war began, global crude oil futures—West Texas Intermediate (WTI) and Brent—soared past $110 per barrel. Today, WTI prices dropped 5%, falling back to around $80 per barrel, the first time since early March. Brent crude also fell over 4%, to approximately $83.60.

Investors had been increasingly concerned that rising oil prices could reignite inflation, forcing central banks to resume interest rate hikes. With oil prices now sharply declining, these concerns have eased.

Asian markets responded with strong buying. Tokyo's stock market closed up 5.0%, led by tech investors SoftBank, Tokyo Electron, and Advantest.

Seoul's market also rose over 5%, driven by semiconductor giants Samsung and SK Hynix.

Elon Musk's SpaceX made its U.S. IPO on the 12th, raising a record $75 billion, injecting fresh momentum into Asian tech stocks. Taiwan's market closed up over 2%.

Shanghai gained 1.6%, Sydney and Singapore both rose over 1%, Manila surged over 6%, and Jakarta jumped over 3% as easing energy cost concerns supported the Indonesian rupiah. Hong Kong closed up 0.5%.

(Translated by: Zhang Zhengqian)