Oil just had one of its worst days of the year, and Asian markets are ready to celebrate. Brent crude tumbled 5.5-7% to around $97.90 per barrel on May 25, while WTI dropped over 6% to roughly $90.99, after US President Donald Trump described ongoing US-Iran negotiations as “largely negotiated” and potentially ready for a public announcement.

The result: futures across Asia-Pacific equity markets pointed sharply higher heading into the trading week, with Japan and South Korea leading the early rally.

What’s driving the oil selloff

The core catalyst here is the Strait of Hormuz. Roughly a fifth of global oil shipments pass through this narrow waterway between Iran and Oman, and disruptions there since early 2026 have kept crude prices stubbornly elevated.

Trump’s comments on May 24, signaling that a deal framework was close, injected optimism that the strait could reopen to normal traffic. A potential agreement reportedly includes restoring shipping flows within 30 days and establishing a 60-day window for broader nuclear negotiations covering Iran’s enriched uranium stockpile.

The talks haven’t materialized out of thin air. Negotiations have been ongoing since 2025, with Pakistan serving as a partial mediator. A temporary ceasefire took effect on April 8, 2026, following mediated discussions, and has since been extended. The current round represents the most concrete progress yet, though significant sticking points remain over uranium control and guaranteed passage through the strait.

Why Asia-Pacific markets are reacting first

Asian economies are disproportionately sensitive to oil prices. Japan, South Korea, and India are among the world’s largest crude importers, meaning every dollar off the barrel price translates directly into lower input costs for manufacturers, cheaper fuel for consumers, and reduced pressure on central banks to keep rates elevated.

For context, Brent had been trading well above $100 per barrel for much of 2026 as Strait of Hormuz disruptions choked supply.

What this means for crypto and risk assets

Lower oil prices feed into softer inflation expectations. Softer inflation expectations reduce the probability of additional rate hikes or delay the timeline for cuts. That chain of logic is what connects a tanker passing through the Strait of Hormuz to the price of Bitcoin on your screen.

No specific crypto tokens have been singled out as direct beneficiaries of the US-Iran progress. This is a macro trade, not a sector rotation.

The cautious read is that markets may be getting ahead of themselves. Trump described the deal as largely finalized, but the unresolved questions around uranium enrichment and long-term strait access are exactly the kind of details that can unravel negotiations at the last minute.

The 60-day negotiation window, if it holds, gives markets a defined timeline to work with.