US Confirms Peace Deal: Hormuz Opens. Here Is What Happens Next.
Breaking News ı By Nicolas Carreno
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The deal is done. And one of the world's most important waterways is opening again.
On Sunday, President Trump announced that the United States and Iran have reached a peace agreement, authorizing the immediate reopening of the Strait of Hormuz and lifting the U.S. naval blockade that has been choking global oil supplies since late February. "Oil will flow on both ends again for the Region, and the World," Trump wrote on Truth Social. The formal signing ceremony is set for Friday in Geneva.
Oil markets did not wait. U.S. crude fell more than 5% to $80.25 per barrel within hours of the announcement, its lowest level since March 10. Brent crude, the global benchmark, dropped 4.26% to $83.31 per barrel.
So what happens next?
From $3.14 to $4.56 in Less Than a Year
Before the war, Americans were paying around $3.14 per gallon. By May 2026, the national average had reached $4.56. In California it touched $6.16. In Washington state, $5.76. Even in the cheapest markets, like Oklahoma, drivers were paying close to $4 per gallon.
Brent crude went from about $70 a barrel before the war to above $104 at its peak. The math always lands at the gas station.
By Sunday, the national average had already retreated to $4.07, as markets had been pricing in a deal for weeks. The formal announcement accelerated that decline.
The Oil Will Not Flood Back Overnight
The agreement allows ships to transit the strait only after mine clearance. That process takes weeks, not hours. Oil fields that were idled during the conflict need time to restart. Port infrastructure damaged during the war requires repairs.
Energy Aspects, a research firm that tracks global oil flows, estimates that tanker traffic will reach about 50% of pre-war levels by the end of June. Baker Hughes, the energy services company, had projected in its financial guidance that the strait would not fully reopen until the second half of 2026. JPMorgan forecasts complete normalization of flows by September.
What Happens to the Dollar
During the Hormuz closure, the dollar climbed as investors sought safe-haven assets and as elevated oil prices pushed inflation higher, reducing expectations that the Federal Reserve would cut interest rates.
With the deal confirmed, that pressure eases. Lower oil means lower inflation. Lower inflation gives the Fed more room to cut rates. And when rate cut expectations rise, the dollar tends to weaken modestly. For Americans, that combination typically translates into cheaper imported goods over time, though the effect is slower and subtler if we're talking about gas.
The Bigger Picture
Analysts noted that Trump moved to close the deal in part because of sustained pressure from rising gasoline prices at home. The economic pain was real, and it was visible.
What remains in doubt is Iran's nuclear program, the stated cause of the war, which is now subject to further negotiations over the next 60 days. The peace deal ends the shooting. It does not yet answer the bigger question.
For now, the direction is clear. Oil is cheaper. Gas prices are falling. The valve is opening. How fast it all normalizes depends on operations and political will, while the nuclear program that started the war in the first place remains unsettled.
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