WASHINGTON — President Donald Trump said Thursday that the war with Iran is effectively over and suggested that a formal agreement could be signed in Europe as early as this weekend, signaling what could become the most significant diplomatic breakthrough of his second term.

Speaking at the White House, Trump declared that the United States had achieved a "great settlement" with Tehran and said the Strait of Hormuz would reopen shortly after the agreement is finalized.

"We just made a great settlement of the war with Iran," Trump told reporters, adding that a signing ceremony could take place in Europe within days.

However, Iranian officials have not confirmed that an agreement has been reached. Tehran's Foreign Ministry said no final decision has yet been made and cautioned that negotiations remain subject to unresolved issues.

Markets Rally on De-Escalation Hopes

Financial markets responded quickly to Trump's announcement.

Oil prices fell sharply as traders priced in the possibility that shipping through the Strait of Hormuz — a critical artery for global energy supplies — could soon return to normal. Equity markets in Europe and Asia also moved higher amid expectations that a broader regional stabilization may be approaching.

Energy analysts noted that much of the recent volatility in oil markets has been tied directly to developments surrounding the conflict and the closure of key shipping routes.

What Happens Next?

According to reports from diplomatic sources, negotiators have already agreed on significant portions of a framework that could include restrictions on Iran's nuclear activities, sanctions relief, and security guarantees related to maritime traffic in the Gulf.

Vice President JD Vance is expected to participate in the signing ceremony if an agreement is finalized.

Despite Trump's confidence, the situation remains fluid. Iranian officials continue to insist that several issues remain unresolved, and previous efforts to secure a final agreement have encountered last-minute setbacks.

For now, investors, diplomats, and regional allies are closely watching whether the coming weekend delivers the breakthrough that both sides have discussed for months.

If completed, the deal would mark a major shift in U.S.-Iran relations and potentially reshape the geopolitical and energy landscape of the Middle East.