US and Iran Agree to Two-Week Ceasefire to Reopen the Strait of Hormuz

The United States and Iran agreed to a two-week ceasefire on Tuesday, averting threatened American strikes on Iranian infrastructure and triggering a sharp rally across global financial markets. Pakistani Prime Minister Shehbaz Sharif mediated the agreement, which was announced shortly before a deadline set by US President Donald Trump for Iran to open the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi confirmed that the strait would be reopened for shipping under Iranian military supervision for the duration of the truce. The ceasefire also applies to US allies and extends as far as Lebanon, according to reporting by Wirtschafts Woche. Negotiations between the two sides are set to begin on Friday in Islamabad, Pakistan.

Pakistan's midnight call averted strikes on Iranian infrastructure The agreement came together in the final minutes before Trump's deadline expired at 2:00 a.m. German time on Wednesday. According to tagesschau.de, Sharif called on Trump to extend the deadline by two weeks while simultaneously asking Iran to open the strait as a gesture of goodwill. Trump had previously threatened heavy attacks on Iran's energy sector if no agreement was reached, with scenarios described in some reports as capable of throwing Iran economically "back to the stone age," according to Focus. Instead, both sides announced the pause in fighting before the ultimatum lapsed. Trump later told AFP that the United States had achieved a "total and complete victory," while Iran described the deal as a victory over Trump, according to web search results. Stock market traders in Asia spoke on Wednesday of a "gift from Pakistan," as reported by Wirtschafts Woche.

The US-Israel war on Iran began on February 28, 2026, when initial strikes killed then-Supreme Leader Ali Khamenei. Iran responded by effectively blocking the Strait of Hormuz, a chokepoint through which approximately one-fifth of global oil and liquefied natural gas traffic passes. The blockade drove oil prices sharply higher in the weeks that followed and raised fears of a global energy crisis. According to tagesschau.de, around 400 million barrels of oil were withdrawn from the market during the roughly 40-day blockade. Saudi Aramco raised its official selling prices for May cargoes to record highs in response to the supply disruption, with the premium for Arab Light grade rising to 19.50 dollars per barrel above the Oman/Dubai average, according to Reuters as cited by Berliner Zeitung.

Oil price collapses 16 percent as Hormuz reopening looms Oil markets reacted immediately and dramatically to news of the ceasefire and the promised reopening of the Strait of Hormuz. The price of North Sea Brent crude fell by up to 16 percent to approximately 91.70 US dollars per barrel in early Asian trading on Wednesday, down from a close of 109.27 dollars the previous day, according to Berliner Zeitung citing Reuters. US crude oil futures for the WTI variety lost 16.84 dollars to reach 96.11 dollars per barrel, according to AP as cited by Berliner Zeitung. The price for Brent fell at times below 92 dollars, reaching its lowest level in more than two weeks, according to multiple German outlets. Analysts cautioned, however, that a full market normalization remains distant. Saul Kavonic, head of energy research at MST Marquee in Sydney, said mothballed oil and LNG production is expected to resume only upon a permanent ceasefire, and that even with a peace agreement, the market will remain tighter by three to five million barrels per day in the coming years than before the war, because repairing damaged export infrastructure takes months or years.

Brent close (Tuesday): 109.27, Brent low (Wednesday): 91.70, WTI futures (Wednesday): 96.11

16 (%) — Brent crude price drop after ceasefire announcement

DAX surges nearly 5 percent, Asian markets halt trading on gains Global equity markets surged in response to the ceasefire announcement, with the relief concentrated in sectors most sensitive to energy prices and geopolitical risk. Germany's DAX index gained 4.9 percent at the opening on Wednesday to reach 24,033 points, according to Der Tagesspiegel, recovering sharply from a close of 22,921.59 points on Tuesday. In Asia, the Japanese Nikkei 225 rose by 5.0 percent to 56,020 points, while South Korea's Kospi gained 5.9 percent — a move so sharp that the Seoul stock exchange temporarily suspended trading to dampen extreme volatility, according to Berliner Zeitung and Wirtschafts Woche. Futures on the S&P 500 gained 2.3 percent, according to AP as cited by Berliner Zeitung. Thomas Gitzel, chief economist at VP Bank, described the mood on financial markets in a note cited by multiple outlets.

„A sigh of relief is the order of the day on the financial markets” — Thomas Gitzel via Der Tagesspiegel

Gitzel added that significantly lower oil prices are sparking hopes that the rise in inflation rates will remain a brief episode, and that central banks could refrain from feared interest rate hikes if the easing is sustained. Morgan Stanley cautioned, however, that energy markets are likely to remain tense even after the easing, while analysts at Focus noted that the political situation remains fragile and sentiment could reverse quickly if negotiations fail or new threats emerge from Washington.

DAX (Germany): 4.9, Nikkei 225 (Japan): 5.0, Kospi (South Korea): 5.9, S&P 500 futures (USA): 2.3