“Ships of the World, Start Your Engines”: Trump’s Iran Deal Sends Oil Crashing and Airlines Soaring

TLDR

• The US and Iran reached an interim deal to reopen the Strait of Hormuz, triggering a major market shift
• Brent crude fell 4.5% to $83.41 and WTI dropped 5.5% to $80.28, hitting three-month lows
• European energy stocks including Shell, Equinor and TotalEnergies fell between 3.5% and 6%
• Airlines and luxury goods stocks surged, with Lufthansa up 6.1% and LVMH gaining 2.4%
• European indices rose broadly, with the FTSE 100 up 0.5% and Paris CAC 40 up 1.8%

The US and Iran have agreed an interim deal to reopen the Strait of Hormuz, one of the world’s most important oil shipping routes. The news sent oil prices sharply lower and reshuffled markets across Europe and Asia on Monday.

Brent crude fell 4.5% to $83.41 a barrel. US West Texas Intermediate dropped 5.5% to $80.28. Both contracts hit their lowest levels since March 10.

President Trump announced the deal on Sunday via Truth Social, writing: “Ships of the World, start your engines. Let the oil flow!” He confirmed the US naval blockade of Iranian ports would be lifted and the strait would reopen by Friday.

A memorandum of understanding is set to be signed in Switzerland on Friday. Pakistan’s Prime Minister Shehbaz Sharif, whose country mediated the talks, confirmed the meeting.

Iran’s deputy foreign minister said a broader agreement would be negotiated over a 60-day ceasefire period. Iran’s semi-official Mehr news agency reported the strait is expected to reopen within 30 days under Iranian arrangements.

Energy Stocks Take the Hit

The drop in oil prices hit European energy companies hard. Shell fell 4.5%, Equinor dropped 5.9%, TotalEnergies was down 5%, and Repsol lost 3.5%. Neste and Eni also posted heavy losses.

Before the conflict closed the strait, it handled around a fifth of global oil supplies. Nearly 600 vessels remain stranded in the area waiting to move.

Oil had peaked at around $120 a barrel during the conflict. Monday’s price of $83.48 marks a steep pullback from those highs.

Airlines and Luxury Stocks Rise

Lower fuel costs lifted airline stocks. IAG, owner of British Airways, gained 3%. Wizz Air jumped 7.8%. Lufthansa rose 6.1% and TUI added 6.7%.

Deutsche Lufthansa AG, DLAKY

Luxury goods companies also moved higher. LVMH gained 2.4%, Hermès rose 2.1%, and Ferrari climbed. Kering and Dior also posted gains.

European indices opened firmly higher. The FTSE 100 rose 0.5%, the CAC 40 in Paris gained 1.8%, and Frankfurt’s DAX was up 1.5%.

Gold prices also rose, reaching $4,322 an ounce. Miners on the FTSE 100 were among the day’s top performers, with Antofagasta up 6.7% and Fresnillo gaining 6%.

The Nikkei 225 in Tokyo surged 5% to a record high. Shanghai’s index rose 1.6%.

The Bank of England is due to make an interest rate decision on Thursday. UK inflation data is expected Wednesday. The fall in oil prices has reduced expectations for further rate rises.

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