Oil Drops 5%, Futures Surge on U.S.-Iran Deal
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- Trump announced via social media late Sunday that the U.S. has completed a peace deal with Iran, declaring 'The Deal with the Islamic Republic of Iran is now complete' and authorizing the reopening of the Strait of Hormuz and removal of the U.S. naval blockade
- Oil prices cratered, with WTI crude falling more than 5% to near $80 a barrel—its first sub-$80 print since March 10—while Brent crude dropped more than 4% to as low as $80.25, on track for its lowest settlement since March 4
- U.S. stock-index futures surged, with Dow futures gaining more than 450 points (0.9%), S&P 500 futures up 1.1%, and Nasdaq-100 futures climbing 1.8%; Bitcoin also rose above $65,400, up over 2.6%
- Iran's deputy foreign minister confirmed the deal to Bloomberg, while the White House referred all questions to Trump's social-media post; the agreement extends the cease-fire by 60 days and pushes the nuclear-program issue to a later round of negotiations
- Pakistani PM Shehbaz Sharif announced the deal will be formally signed in Switzerland on Friday, stating 'Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon'—Pakistan had mediated the talks
- SPI Asset Management's Stephen Innes warned the market not to confuse the headline with resolution, calling the pact 'a marketable ceasefire framework that kicks the hard problems down the road' and noting 'the war premium is no longer the base case, but the verification premium is still alive'
- U.S. gas prices fell below $4/gallon on Sunday for the first time since April 20, with GasBuddy's Patrick DeHaan projecting the national average could drop below $3.75/gal by July 4 if the deal holds, though hurricane season remains a wildcard
Why it matters: The Strait of Hormuz closure since late February had triggered a sustained oil shock that lifted WTI above $80 and disrupted Persian Gulf exports. If the strait reopens by Friday as planned, consumers could see gas fall toward $3.75/gal by July 4—but the source notes the nuclear issue is merely deferred, and Innes warns traders should not 'confuse the opening gap with the whole move' given the deal's verification risk.
