By Ronnie Harui and Giulia Petroni
Oil prices fell to their lowest since the start of the Iran war after President Trump signed a deal that reopens the Strait of Hormuz, a critical shipping lane that used to carry about one-fifth of global oil supplies.
In afternoon European trading, front-month Brent crude was down 1.2% to $78.62 a barrel, while West Texas Intermediate futures fell 1.8% to $74.64 a barrel. Both benchmarks were on track for weekly losses of more than 13%.
The memorandum of understanding allows the reopening of the Strait of Hormuz and lifting of a U.S. naval blockade on Iranian ports, fueling expectations that a wave of supply will soon reach global markets. A full return to normal shipping operations is likely to take months, however, as vessel operators contend with logistical and security hurdles–including repositioning tankers, rescheduling port calls and securing insurance coverage.
“Attention has now shifted to the pace at which traffic through the Strait of Hormuz can recover,” analysts at Saxo Bank said. “An estimated 100 million barrels of crude and refined products are already loaded on tankers and waiting to leave the Gulf, while regional producers are taking steps to restart shut-in production.”
Iranian production is expected to recover more quickly than output elsewhere in the Gulf, as the removal of the naval blockade could enable exports to restart rapidly and support a swift rebound in production and loadings, according to Homayoun Falakshahi, head of crude oil analysis at Kpler.
Under the agreement, the U.S. will also waive sanctions targeting exports of Iranian oil and other petroleum products.
Meanwhile, Asian government bonds fell in price terms after the Federal Reserve struck a hawkish tone. The U.S. central bank held rates steady on Wednesday, but its updated quarterly economic projections showed nine of 19 officials forecast at least one rate increase by the end of 2026, up from none in March.
“The market was not prepared for a hawkish Fed,” said Eugene Leow, senior rates strategist at DBS Group Research.
Yields on 10-year Japanese government bonds edged up 2.1 basis points to 2.621%, while 10-year Australian sovereign securities were 1.1 basis points higher at 4.798% and 10-year New Zealand government debt advanced 5.5 basis points to 4.465%. Bond yields move inversely to bond prices.
Equity markets across the Asia-Pacific region were mixed, with South Korean and Japanese equity markets climbing to new highs and closing above the key 9,000 and 70,000 levels respectively for the first time. The Kospi ended 2.25% higher, while the Nikkei Stock Average rose 1.6%. Hong Kong’s Hang Seng Index fell 1.8%.
European indexes were lower in early afternoon trading. Germany’s DAX and France’s CAC 40 were down around 0.2% each, while London’s FTSE 100 index was down 1% and the Europe-wide Stoxx 600 index fell 0.65%. U.S. futures rise, with the Dow Jones Industrial Average up 0.2%, the S&P 500 0.6% higher, and the tech-heavy Nasdaq up 1.3%.
Write to Ronnie Harui at ronnie.harui@wsj.com and Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
June 18, 2026 08:04 ET (12:04 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.