Iran-Oman shipping deal sends oil lower, gold past $4,300

Iran announced it had reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz on Wednesday, raising hopes for a partial resumption of energy flows through the critical waterway and a potential path toward ending the more than five-month US-Iran conflict. Oil prices fell sharply while gold surged to a seven-week high as markets recalibrated expectations for inflation and interest rates.

Oil Slides, Gold Rallies on Peace Optimism

West Texas Intermediate crude slipped below $75 a barrel while Brent crude traded near $79, as the proposed deal reduced the supply-risk premium that had kept energy prices elevated since the war began in late February. Iranian deputy foreign minister Kazem Gharibabadi told domestic media that the route would be temporary and remain active for "two to four months," adding that "this understanding does not mean the full reopening" of the strait.fxempire+2

Gold moved in the opposite direction, briefly surpassing $4,300 an ounce after jumping 4.1% in the previous session — its largest single-day gain since February. The rally reflected shifting rate expectations: markets moved to fully price in only a single US rate increase by year-end, down from two as recently as last week. "Macro headwinds being pushed out on the horizon, along with US-Iran deal hope, have put some major wind in the precious metals' sails," TD Securities analysts including Ryan McKay wrote in a note.freemalaysiatoday

Global Markets React

The ripple effects spread across global markets. Australia's S&P/ASX 200 hit a record high, lifted by a 5.7% surge in gold producers and a 2.2% jump in miners. Pakistan's KSE-100 gained over 1,700 points on Thursday, extending a nearly 3,000-point rally from Wednesday, as investors bet that lower oil prices would ease inflationary pressures on the import-dependent economy.profit.pakistantoday+1

Asian tech stocks pulled back, however, as the AI-driven rally paused. South Korea's Kospi fell 3.6% and Japan's Nikkei 225 declined 1.6%, weighed down by profit-taking in semiconductor shares after mixed earnings from chipmakers. On Wall Street, the S&P 500 slipped 0.18% on Thursday as investors assessed earnings and Middle East developments.sharecafe+1

Uncertainty Persists

Despite the optimism, risks remain. Iran clarified it was in contact with mediators in Oman and had not engaged in direct talks with the United States, while also warning that a deal with Oman would not guarantee security in the strait. Reports of attacks on Saudi oil tankers near Yanbu and in the Gulf of Aden added further uncertainty. Fed Governor Lisa Cook warned Wednesday that she was "prepared to act" if inflation did not continue slowing, noting that "with five years of above-target inflation, the risk grows that higher inflation may become entrenched".economictimes+4