Trump Weighs Declaring End to Iran Conflict as Oil Convoy Passes Hormuz
US President Trump is reportedly considering a formal declaration that the war with Iran is over. This comes as the US military escorted 18 million barrels of oil through the Strait of Hormuz on Tuesday. Meanwhile, the yen strengthened on hawkish Bank of Japan expectations, gold surpassed $4,400, and Asian equities followed Wall Street higher.
The Wall Street Journal reports Trump has discussed ending the war with senior aides, betting economic pressure could dismantle Iran's nuclear program. Separately, Defense Secretary Hegseth extends troop deployments into 2027, indicating the Pentagon expects continued conflict. On Tuesday, the US Navy escorted 40 tankers carrying 18 million barrels through Hormuz, intercepting a cruise missile and repelling drones. Iran also struck a US base in Kuwait, with local defenses responding.
Gold rebounded above $4,420 as the dollar weakened and yields pulled back. Japan's services PMI hit a five-month high, strengthening BOJ hike expectations, while China's private services PMI beat forecasts. Asian equities mostly rose, though the Nikkei lagged on yen strength. The yen fell below 158 per dollar, its lowest since August 10.
This development could reshape regional security perceptions, as a declared end might reduce immediate shipping risk premiums, yet extended troop deployments signal lingering instability. Energy markets may see volatility ease if the declaration holds, but Iran's nuclear ambitions remain unresolved. For Asian economies, lower oil transit risk could support import-dependent nations, while hawkish BOJ policy may pressure yen-based exporters. Investors could face mixed signals, balancing geopolitical relief against persistent inflation and rate uncertainty.