Trump Cites 'Very Good Discussions' with Iran, Boosting Hopes for Hormuz Reopening

U.S. President Donald Trump said his administration held "very good discussions" with Iran, fueling a market rally on expectations that a five-month conflict disrupting global energy supplies could soon de-escalate. The remarks prompted a fall in oil prices and a jump in equities as investors priced in the possibility of a deal to reopen the critical Strait of Hormuz.

Market Reacts to Diplomatic Overtures

Speaking to Fox News' "@ Night" show on Tuesday, Trump stated that the two sides "had an all-day negotiation," adding that the Strait of Hormuz "is going to be open very soon." The comments provided a significant boost to market sentiment, with Wall Street hitting record highs on Tuesday, a trend that continued into Asian trading on Wednesday.

In response to the perceived reduction in geopolitical risk:

• Brent crude futures, the international benchmark, fell 0.62%.
• West Texas Intermediate (WTI) crude futures dropped 0.83%.
• The S&P 500 index surged 1.79% to a new record.

Reports of an Imminent Deal Emerge

Ad

Adding to the optimism, Axios reported that the U.S. and Iran are nearing an interim agreement, with the assistance of Oman, to reopen the strategic waterway. The report, which cited two regional sources and a U.S. official, suggested an official announcement could come as early as Wednesday.

However, Iranian state media presented a more cautious stance, citing an informed source who said an agreement would be delayed "as long as the United States continues to threaten Iran." This followed a warning from Trump that if Iran were to "back out again, they are going to get hit really hard."

Context: A Critical Maritime Chokepoint

The negotiations aim to resolve a conflict that has seen Iran halt most traffic through the Strait of Hormuz, a chokepoint that normally carries about a fifth of global oil and liquefied natural gas shipments. Qatar has also cited progress in mediation efforts, with Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and President Trump discussing the matter by phone on Tuesday, according to the Emiri office.

For its part, Iran's Foreign Ministry confirmed that talks with Oman regarding safe shipping lanes were "positive and continuing," state media reported. The discussions are focused on establishing transit routes that respect the national security and sovereign rights of both nations, which share control of the vital strait.