President Donald Trump announced on Truth Social that a deal to end the conflict with Iran will be signed on Sunday, and that the Strait of Hormuz will open immediately after the agreement is in place.

The Strait of Hormuz is one of the world's most critical oil chokepoints. Roughly 20 percent of global oil supply, along with significant volumes of liquefied natural gas, passes through this narrow waterway between Iran and Oman. Any disruption there ripples directly into energy prices worldwide, and any reopening carries the opposite effect: a potential sharp drop in oil prices as supply anxiety eases.

Why this matters for energy markets

Oil markets have priced in a substantial geopolitical risk premium throughout the period of heightened US-Iran tensions. A confirmed, binding deal that reopens Hormuz would remove that premium quickly. Traders and analysts watching crude benchmarks like Brent and WTI would likely see immediate downward pressure on prices if the agreement holds. Lower oil prices, if sustained, feed through to fuel costs, airline tickets, freight rates, and broadly to inflation.

The framing of an immediate reopening of the strait is significant. It suggests the deal, as Trump describes it, includes a concrete operational commitment from Iran, not just a ceasefire declaration. Whether that commitment is verified and enforceable is the central question markets and governments will be asking before Sunday's reported signing.

What to watch before and after Sunday

Trump's announcement is a single social media post on Truth Social. No secondary confirmation from Iranian officials, US diplomatic channels, or allied governments has been cited in the available information. Deals of this scale typically involve back-channel negotiations, multilateral witnesses, and formal treaty or executive agreement language. None of those details are confirmed here.

The gap between a presidential announcement and a signed, functional agreement is where past US-Iran diplomacy has repeatedly stalled. Investors and policymakers will be watching for Iranian state media confirmation, any joint statement from both governments, and the identity of signatories and witnesses at the reported signing ceremony.

If the deal does proceed as described, the immediate economic consequences extend beyond oil. Iran's reintegration into global trade, even partially, could affect shipping insurance rates, regional currency markets, and the calculus of Gulf state sovereign wealth funds. Sanctions relief, if part of the agreement, would unlock Iranian oil exports more broadly, adding further supply-side pressure to crude prices globally.

For India, the stakes are direct. India has historically been one of Iran's largest oil customers and has significant infrastructure investments tied to Iran's Chabahar port. A normalized US-Iran relationship could reopen Iranian crude as a cost-effective import option and potentially ease the legal complications that have constrained Chabahar's development under US sanctions.

The coming 48 to 72 hours will determine whether this announcement marks a genuine diplomatic breakthrough or remains an unverified claim. Markets will price in uncertainty until official confirmation from both sides is on record.