US-Iran Peace Deal Crashes Oil 4%, ASX Eyes 0.7% Gain

Iran agreed to a peace pact with the United States on Friday. Iran's deputy foreign minister Kazem Gharibabadi confirmed the two countries will sign a memorandum of understanding at a summit in Switzerland on June 19. Donald Trump declared: "Ships of the World, start your engines. Let the oil flow!"

The news sent Brent crude down 4% to $83.84 a barrel. The Strait of Hormuz, closed since the conflict began, is expected to reopen. ASX futures rose 0.7% Sunday evening, pointing to an open near 8,850 points.

Earlier coverage: US and Iran Peace Deal Ends 4-Month War, Reopens Strait of Hormuz

The energy readthrough

The ASX's XEJ energy index closed Friday just above 10,500. It had been drifting lower over the prior fortnight as ceasefire rumors spread. The deal's confirmation removes a risk premium that traders had built into oil prices and shipping costs since the Strait of Hormuz closure.

Simple read: oil falls, energy stocks open under pressure. The better read is more layered. Most Australian crude production is light sweet from the North West Shelf, not Middle Eastern heavy sour. The direct volume exposure is limited. Still, the benchmark move resets valuation across the sector. The XEJ index now faces a test of the 10,500 level. A break below that would put 10,300 in play, where the index held in April before the conflict escalated.

For the broader market, the 0.7% futures gain reflects a rotation out of energy and into cyclical sectors. Banks and retailers are likely to benefit from lower energy costs and reduced geopolitical risk. The ASX 200 may reclaim its April highs if the rally holds through the Friday signing.

Other movers

ASX Ltd faces a $20.5 million penalty after ASIC alleged misleading statements about its CHESS replacement project. The Federal Court must approve the settlement. ASX also pays $3 million in costs.

Vault Minerals expects 332,000 to 360,000 ounces of gold production in FY26, with $278 million in new capital spending. Gold itself hit $4,309 an ounce.

Power Minerals started drilling at the Morro Do Ferro project in Brazil. Evolution Energy kicked off the Chikundo copper program in Tanzania.

Commodities snapshot

Brent crude settled at $83.84. Iron ore in Singapore edged up 0.3% to $101.50 a tonne. Gold climbed to $4,309. The Australian dollar bought US 70.8 cents.