Global financial markets have moved quickly on signs of progress in U.S.-Iran talks. Global oil prices fell nearly 7% in a day, and New York stocks set fresh record highs. South Korea’s Kospi also briefly topped 7,500 for the first time, and the won-dollar exchange rate returned to prewar levels. Investors are betting that Middle East risks could ease sooner than expected — a familiar burst of weekend optimism from the region.
The United States and Iran are said to be discussing the possibility of signing a memorandum of understanding to end the war. Reported items on the table include limits on Iran’s uranium enrichment and a halt to operations at nuclear facilities, a phased easing of U.S. sanctions, and normalization of shipping through the Strait of Hormuz.
U.S. President Donald Trump added to expectations by saying the chances of an agreement were “very high.” For markets, that suggests the worst-case scenario — a surge in oil prices and a shock to global supply chains — may be less likely. Still, the current rally appears to reflect optimism that may be running ahead of the negotiations.
Markets have begun pricing in a “postwar” outlook, but the talks still face wide gaps on core issues.
U.S. demands go beyond a simple ceasefire. They are described as including dismantling nuclear facilities such as Fordow and Natanz, removing enriched uranium, round-the-clock inspections by the International Atomic Energy Agency, and long-term limits on enrichment — steps that amount to a redesign of Iran’s nuclear program. Iran, however, is unlikely to accept such terms without parallel guarantees for regime security and sanctions relief. The Strait of Hormuz is also a high-stakes issue, combining sovereignty concerns with economic pressure, making a deal harder to reach.
For that reason, the recent market response may be better understood as relief that escalation risks have eased, rather than confidence in a durable peace framework. The United States is pursuing talks while maintaining military pressure and a maritime blockade, and Iran has not withdrawn its claim to authority over transit controls. Tensions have not disappeared; they appear to have been temporarily lowered to a manageable level.
The episode also carries broader implications for the international order. With the Strait of Hormuz — a key route for global oil shipments — effectively used as a geopolitical bargaining chip, vulnerabilities in energy security and the system of freedom of navigation have again been exposed.
That is not only a Middle East issue. It increases volatility across global logistics and financial systems. The recent swings in oil prices, exchange rates and semiconductor stocks underscore how instability around the strait can ripple through the world economy.
South Korea’s sensitivity reflects its heavy reliance on imported crude and maritime transport. Stability in oil prices and the exchange rate is clearly positive, but it is too early to read the current moment as a return to structural stability. Foreign inflows, driven largely by short-term expectations of reduced geopolitical risk, could also reverse.
For now, markets are reacting to the possibility that “the worst can be avoided.” Whether that turns into a sustainable agreement and a restoration of order will depend on what is negotiated — and how it is implemented. The international community is watching to see whether this round of Middle East uncertainty can move beyond short-lived hope and toward a more stable framework.
* This article has been translated by AI.
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