Trump said a settlement with Iran was reached and canceled military strikes. The Strait of Hormuz would reopen, compressing the war risk premium in crude.
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President Donald Trump said Thursday the U.S. and Iran had reached a “great settlement” to end the war. He had canceled planned military strikes for that evening. The deal would be signed “within the next few days,” Trump told reporters at the White House, and the Strait of Hormuz would reopen immediately after signing.
Trump said the signing could take place over the weekend somewhere in Europe. Vice President JD Vance was expected to attend. The president gave no specific location or host country. The cancellation of strikes followed what Trump described as advanced talks involving senior levels of the Iranian leadership.
He provided no details on the terms of the settlement. The abrupt shift in posture marks one of the most dramatic moves in U.S.-Iran relations since October 2023. The Strait of Hormuz, through which roughly a fifth of global oil supply passes, had been a flash point for shipping security and insurance costs.
The announcement caught markets in the final hour of U.S. trading. For crude traders, the immediate read is a compression of the war risk premium that had been priced into front-month Brent and WTI contracts. Shipping rates through the strait, which reflected elevated war-risk insurance premiums, should also decline. The longer-term impact depends on whether the settlement holds and whether it includes broader nuclear or sanctions relief terms. The White House did not release a full agreement text.
The cancellation of planned strikes removes a near-term escalation risk that had kept defense stocks elevated and crude oil above recent technical support levels. With the strait reopening, supply chain disruptions for refined products and LNG become less likely. The scheduled signing in Europe, if completed, would lock in the new status quo ahead of the weekend trading session.
Trump’s remarks were his first direct confirmation of a negotiated settlement after weeks of on-again, off-again signals from Tehran. The Iranian government had repeatedly denied that a deal was close. The White House said Vance’s attendance would represent the administration’s commitment to the agreement. Questions remain about verification mechanisms and enforcement. For the coming days, markets will focus on a singular fact: the threat of a U.S.-Iran military confrontation has been removed.
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