Oil prices fell and global stock markets rallied on Thursday after the United States and Iran signed an interim agreement aimed at ending their conflict and restoring stability to energy markets.

Brent crude dropped 1.9 percent in Asian trading to $78.07 a barrel, nearly returning to levels seen before the war began in late February.

The decline resumed after a brief spike on Wednesday, when US President Donald Trump warned he could “go right back to dropping bombs” on Iran if the country did not “behave”.

Optimism surrounding the agreement lifted Asian markets, with Japan's Nikkei 225 and South Korea's Kospi reaching record highs. US stock futures also advanced.

Pakistani Prime Minister Shehbaz Sharif, who mediated talks between Washington and Tehran, announced that the memorandum of understanding had taken effect immediately.

He said Iran would reopen the Strait of Hormuz and the United States would lift its naval blockade of Iranian ports.

Despite the agreement, concerns remain over shipping safety in the Striat of Hormuz. According to the news source, hundreds of vessels are still waiting to transit the strait.

Jakob Larsen, chief safety and security officer at BIMCO, warned: “Due to lack of details and a history of overly optimistic reassurances, we believe the security situation for the shipping industry remains volatile, and we still consider it very risky for ships to commence transits at this point.”

“We advise shipowners to continue doing thorough risk assessments and appeal to all parties to put the safety of seafarers first”, he added.