A preliminary ceasefire agreement between Washington and Tehran has been announced, but the world's most critical oil chokepoint remains shut until Friday's signing.
Oil traders in Tokyo were already moving on Sunday morning before most of the world had finished reading the headline. West Texas Intermediate crude fell roughly 4%, and Brent fell to around $84 per barrel, after the United States and Iran announced a preliminary peace agreement ending months of conflict that had paralysed global energy markets. The deal is set to be formally signed on Friday — and only then, President Donald Trump confirmed, will the Strait of Hormuz reopen for shipping traffic. Trump posted the timeline on his Truth Social platform, framing it as a moment of economic relief for "the Region, and the World.
" The Strait of Hormuz carries approximately 20% of the world's crude oil supply, and its effective closure since the start of the conflict has driven a sustained spike in energy prices felt from Lagos to Seoul. Mine-removal operations, Trump said, must be completed before vessels can safely pass through again. Not everyone in Washington was ready to celebrate. Republican Senator Lindsey Graham, who has long pushed for a harder line against Tehran, wrote on X that he was "somewhat concerned" because Iran's stated understanding of the agreement appeared to differ from the American negotiating team's account.
Gregory Meeks, the senior Democrat on the House Foreign Affairs Committee, welcomed the shift toward diplomacy but demanded that any final deal be "durable, enforceable, transparent, and subject to rigorous oversight by Congress."
United Nations Secretary-General António Guterres described the preliminary agreement as a critical step toward ending the war. Yet the gap between Washington's and Tehran's versions of what was actually agreed leaves the deal's durability genuinely unclear.