A formal ceasefire ending the eight-week Iran-Hormuz crisis was signed Saturday in Islamabad in a televised ceremony attended by U.S. Secretary of State Marco Rubio, Iranian Foreign Minister Abbas Araghchi, Pakistani Prime Minister Shehbaz Sharif, and Omani Foreign Minister Badr Albusaidi. The agreement formalizes the framework outlined in Friday's final draft and includes a phased reopening of the Strait of Hormuz to neutral-flag shipping under joint Pakistani-Omani monitoring.
Within four hours of the signing, a convoy of three Saudi-flagged Very Large Crude Carriers (VLCCs) carrying a combined 8.4 million barrels of crude oil departed Ras Tanura on the world's most-watched shipping route — the first Saudi-flagged transit since February 26. Bloomberg ship-tracking data showed the vessels reaching the eastern entrance to the Strait without incident.
Energy Markets Reprice Hard
Brent crude futures plunged 6.4% in Sunday-evening Asia electronic trading to $93.40 per barrel, while WTI fell to $89.10. The collapse extends a five-week decline from the cycle peak of $124 reached in late March. Goldman Sachs immediately cut its second-half Brent forecast to $78 from $95, while JPMorgan moved to $80. Asian airline and shipping equities are expected to open sharply higher when Tokyo, Hong Kong, and Singapore exchanges trade Monday.
The deal includes the unfreezing of approximately $6.2 billion in Iranian central-bank assets held in South Korean and Japanese escrow accounts, suspension of fresh U.S. sanctions, and the establishment of a $4 billion Gulf Reconstruction Fund jointly capitalized by Saudi Arabia, the UAE, and Qatar.
Markets Brace for Monday Open
S&P 500 e-mini futures jumped 1.4% in thin Saturday trading following the signing, while Nasdaq 100 futures climbed 1.7%. The CBOE Volatility Index, which closed Friday at 16.8 — its lowest since the conflict began — is expected to test 14 if the ceasefire holds through Monday's open. The U.S. dollar index fell 0.4% to 104.2 as safe-haven flows continue to unwind.
Treasury Secretary Scott Bessent told reporters at the Islamabad ceremony that "this agreement removes an enormous tail risk from the global economy" but cautioned that "implementation will be the test." U.S. Navy Fifth Fleet vessels will remain on station in the region through at least the end of the third quarter under the deal's verification protocols.