Oil prices fell about 6% on Monday after US President Donald Trump announced that the United States had finalized an agreement with Iran to reopen the Strait of Hormuz.

US crude oil futures dropped below $80 per barrel for the first time since March during early trading before settling around 5.9% lower at $79.90 per barrel by 10:41 a.m. ET. Global benchmark Brent crude also declined about 5.5% to $82.57 per barrel.

In a post on Truth Social, Trump declared: “The agreement with the Islamic Republic of Iran is now complete.”

He added that the Strait of Hormuz would reopen without transit fees and that the United States would end its naval blockade of Iran.

“Ships of the world, start your engines... let the oil flow!” Trump wrote.

In a later post, he clarified that the strait would reopen on Friday, the same day the formal peace agreement is scheduled to be signed in Switzerland.

“With the strait opening upon the signing of the agreement on Friday, and for mine-clearing purposes, oil will once again flow in both directions for the benefit of the region and the world,” Trump added.

Disagreements emerge over key details

Early signs of disagreement have already emerged between Washington and Tehran regarding the interpretation of the agreement.

Iranian state-affiliated media reported that passage through the Strait of Hormuz would remain toll-free for only 60 days, after which Iran and Oman would assume responsibility for managing the waterway, according to Tasnim News Agency.

By contrast, US Vice President JD Vance told CNBC that Washington expects the strait to remain open without transit fees over the long term.

Before tanker traffic collapsed in early March due to Iranian attacks, roughly 20% of global oil supplies passed through the Strait of Hormuz. The disruption triggered what many analysts described as the largest oil supply shock in modern history.

Shipping industry remains cautious

Global shipping association BIMCO warned that statements from both the United States and Iran remain vague and do not provide sufficient clarity regarding timing or safe navigation routes through the strait.

Jakob Larsen, Head of Safety and Security at BIMCO, said:

“Given the lack of details and a history of overly optimistic promises, we believe the security situation for the shipping industry remains highly volatile, and we still consider the resumption of vessel transits at this stage to be extremely risky.”

Larsen added that naval mines remain one of the biggest concerns for commercial shipping.

Earlier this month, US Secretary of State Marco Rubio told Congress that Iran had deployed naval mines across parts of the Strait of Hormuz, raising further questions about how quickly normal shipping operations can resume.

Global markets are celebrating a preliminary agreement between the United States and Iran aimed at ending a conflict that lasted nearly four months and contributed to a slowdown in global economic activity. Global equities rallied on Monday, while oil prices and bond yields moved lower.

Although a final agreement has not yet been signed, both sides have agreed to a memorandum of understanding and halted military operations. The reopening of the Strait of Hormuz is also expected as part of the deal, according to US President Donald Trump.

Here is what is currently known about the agreement and what could happen next.

Has Iran signed a peace agreement?

Iranian Deputy Foreign Minister Kazem Gharibabadi said the text of the agreement has been finalized and is scheduled to be signed on Friday in Geneva.

“We have announced a permanent and immediate end to the war on all fronts,” he said. Trump also stated that the US naval blockade imposed on Iran would be lifted.

As of Monday, however, the memorandum of understanding had not been officially published, and most available details are based on statements from officials involved in the negotiations.

Will the Strait of Hormuz reopen?

The Strait of Hormuz has not officially reopened yet, but both Trump and Gharibabadi have stated that it will reopen on Friday following the signing ceremony in Geneva.

Trump focused heavily on the strait in a post on Truth Social, saying it would reopen without transit fees.

“I hereby fully authorize the reopening of the Strait of Hormuz free of charge, while simultaneously ordering the immediate removal of the US naval blockade. Ships of the world, start your engines. Let the oil flow,” he wrote.

He later reiterated that the strait would reopen “upon signing the agreement on Friday” to allow for mine-clearing operations.

Iran’s semi-official Mehr News Agency reported that the reopening would take place under “Iranian arrangements.”

Meanwhile, Qatar welcomed the agreement on Monday, specifically highlighting efforts to address outstanding issues between Washington and Tehran, including freedom of navigation through the Strait of Hormuz.

A fragile ceasefire and difficult negotiations ahead

The United States and Iran have temporarily suspended direct hostilities. The agreement includes a 60-day ceasefire period intended to create a framework for future negotiations covering Iran’s nuclear program, sanctions, and regional security issues.

Those talks could eventually lead to a comprehensive peace settlement. However, Gharibabadi said the 60-day nuclear negotiations cannot begin unless Washington releases billions of dollars in frozen Iranian assets, a condition the United States has rejected.

Trump reiterated on Sunday that “Iran will never have a nuclear weapon.” He also told The New York Times that the United States could launch new military action if negotiations fail to resolve concerns surrounding Iran’s nuclear ambitions.

Torbjorn Soltvedt, Senior Middle East Analyst at Verisk Maplecroft, told CNBC:

“The risk of renewed conflict will remain present in the coming months. Delaying the most difficult issues until later negotiations extends uncertainty and leaves the root causes of the confrontation unresolved.”

One of the most important outstanding issues is that Israel is not a party to the agreement despite having participated in the conflict since the first strikes on February 28. Israeli operations inside Lebanon have also periodically tested previous ceasefire arrangements.

While Gharibabadi previously stated that the “permanent and immediate end to the war” includes Lebanon, it remains unclear whether Israel accepts those terms.

Israeli Defense Minister Israel Katz said on Monday that Israeli forces would remain in what he described as “security zones” in Lebanon, as well as in Gaza and Syria. He added that Israel would respond if Iran took action against it in connection with developments in Lebanon.

Who may attend the Geneva signing ceremony?

Tehran has not yet announced an official list of attendees, a detail that could provide important clues about the level of support the agreement enjoys within Iran’s political establishment.

Iranian Foreign Minister Abbas Araghchi, who played a central role in the Pakistan-mediated negotiations, is considered the leading candidate to sign the agreement on behalf of Iran.

If Parliament Speaker Mohammad Bagher Ghalibaf attends, it could be interpreted as a sign of support from conservative factions and Iran’s security establishment. Participation by senior security official Mohammad Bagher Zolghadr would likely be viewed as an indication of approval from Iran’s Supreme Leader, despite Zolghadr being under sanctions.

No official US delegation has yet been confirmed.

Reports have suggested that US Vice President JD Vance could attend the ceremony if the agreement proceeds. During an interview on CNBC’s Squawk Box, Vance said the administration expects “a full spectrum of representatives” to participate in Friday’s talks. He added that he expects the Iranian delegation to include Ghalibaf, Araghchi, senior security officials, and representatives from various political factions.

Trump could also travel directly to Geneva from the G7 Summit in Évian-les-Bains, France. US envoy Steve Witkoff, who led much of Washington’s negotiating effort with Iran, is also expected to be involved.

The conflict extended beyond the United States and Iran, drawing in several regional powers.

One of the key signals markets will be watching is whether Saudi Arabia and United Arab Emirates send official representatives to the signing ceremony. Their participation would be viewed as a sign of broader regional backing for the agreement.

US stock indexes rallied sharply on Monday as investors grew increasingly optimistic that the United States and Iran are nearing an agreement to end the conflict and reopen the Strait of Hormuz, sending oil prices to their lowest levels since March and boosting demand for risk assets.

The Dow Jones Industrial Average surged by about 600 points to reach a new intraday record high, while the S&P 500 gained 1.6% and the Nasdaq Composite jumped more than 2.5%, led by technology and semiconductor stocks.

The gains followed US President Donald Trump's announcement that Washington and Tehran had reached a framework agreement, with a formal memorandum of understanding expected to be signed in Switzerland on Friday through Pakistani mediation. The agreement includes reopening the Strait of Hormuz and restoring maritime traffic, contributing to a roughly 5% decline in oil prices.

Brent crude futures fell to around $82.90 per barrel, while US West Texas Intermediate crude dropped to near $80 per barrel amid expectations of a gradual recovery in regional oil supplies.

Airline, travel, and leisure stocks benefited from lower energy costs. Shares of United Airlines, Delta Air Lines, and American Airlines advanced alongside cruise operators.

By contrast, energy stocks came under pressure, with shares of Exxon Mobil and Chevron falling about 5%.

Meanwhile, SpaceX extended its gains in its second day of trading following its historic IPO, rising another 6% after surging 19% in its debut session and lifting its market capitalization above $2 trillion.

Semiconductor stocks also supported the broader market rally. Shares of Micron Technology jumped 9% after several financial institutions raised their price targets, while NVIDIA, Intel, and Marvell Technology posted gains, pushing the Philadelphia Semiconductor Index more than 4% higher.

Analysts believe the decline in oil prices could provide the Federal Reserve with greater flexibility in addressing inflation, particularly as investors prepare for this week's policy meeting, the first chaired by Kevin Warsh.

In currency markets, the US dollar remained near its lowest level in ten days, while expectations of easing inflationary pressures strengthened investor appetite for risk-sensitive assets, including equities and cryptocurrencies.

The metals market also reacted to the geopolitical developments. Aluminum prices in London fell to a two-month low amid expectations that metal shipments through the Strait of Hormuz—which accounts for roughly 9% of global aluminum production—will gradually resume.

Aluminum prices in London dropped to their lowest level in two months on June 15, 2026, following a framework agreement between the United States and Iran aimed at restoring metal shipments through the Strait of Hormuz.

The agreement is expected to ease supply disruptions in the region, which accounts for roughly 9% of global aluminum production.

By midday trading, three-month aluminum contracts had fallen more than 3% to $3,426 per metric ton, while other metals such as copper and tin posted modest gains.

Shares of Alcoa also declined 3.1% in premarket trading.

The latest agreement between Washington and Tehran is being viewed as a significant development that could increase aluminum shipments through the Strait of Hormuz, one of the world’s most important trade routes.

A reopening of the corridor is expected to help ease supply-chain bottlenecks that have weighed on the aluminum market in recent months, particularly given the region’s substantial contribution to global aluminum output.

The decline in prices reflects market expectations of improving supply conditions and reduced concerns over potential disruptions.

[Alcoa](https://www.alcoa.com?utm_source=chatgpt.com) is one of the leading companies in the basic materials sector, with a market value of approximately $18.15 billion. The company operates across bauxite mining, alumina refining, and primary aluminum production through a vertically integrated business model.

While Alcoa remains one of the world’s largest producers of bauxite and alumina, it is not among the top ten global aluminum producers, a ranking largely dominated by Chinese companies.

The company’s financial performance remains highly sensitive to fluctuations in aluminum and broader metals prices in global markets.