By Ronnie Harui
Oil prices declined and Asian equity markets advanced Monday morning amid hopes for a U.S.-Iran deal to end the conflict.
A U.S. official said Sunday that there's an agreement in principle under which Iran would reopen the Strait of Hormuz, The Wall Street Journal reported, citing the official. Seafarers said Sunday that some vessels stuck in the Persian Gulf have already begun moving toward the strait on expectation of a deal that reopens the key waterway through which one-fifth of the world's oil is typically transported.
Meanwhile, President Trump said in a Truth Social post on Sunday that he was in no hurry to complete an end-of-conflict agreement with Iran. "Both sides must take their time and get it right," he said.
The main theme was risk-on, "building on optimism over a U.S.-Iran deal to end the war," Commerzbank Research analysts said in a report.
Front-month West Texas Intermediate crude oil futures dropped 4.9% to $91.87 per barrel and front-month Brent crude oil futures declined 4.6% to $98.82 a barrel, ICE data showed.
Reopening the Strait of Hormuz would ease oil-supply disruption concerns and alleviate inflationary pressures. This could in turn spur purchase of risky assets and provide central banks more scope to keep interest rates on hold or even consider rate cuts.
Equity markets across most of the Asia-Pacific region advanced. Japan's Nikkei Stock Average climbed 2.9%, Singapore's FTSE Straits Times Index added 0.5%, and Australia's ASX/200 benchmark index edged 0.1% higher. Markets in Hong Kong and South Korea were closed for a public holiday.
"Investors cheered signs of progress in talks to end the Middle East conflict and a strong corporate earnings season in the U.S.," Phillip Securities Research team said in commentary.
Government bonds in the region also rose in price terms. Yields on Japan's 10-year government bonds fell 2.5 basis points to 2.735%, Australia's 10-year sovereign securities declined 4 basis points to 4.8770%, and New Zealand's 10-year government debt dropped 5 basis points to 4.6440%. Bond yields move inversely to prices.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
May 24, 2026 21:19 ET (01:19 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
