Dearball Jordan.
(C) BBC
Oil prices fell sharply on Tuesday, dropping nearly 5%, after Israel agreed to a ceasefire with Iran following almost two weeks of escalating conflict.
Brent crude, the global benchmark, briefly plunged to $68 per barrel before partially rebounding. The market remained volatile after both Iran and Israel accused each other of breaching the newly brokered truce within hours of its announcement.
Fears of a wider regional disruption had recently pushed oil prices higher, as traders worried Tehran might block the Strait of Hormuz, a vital route for global oil and gas shipments.
Stock markets in the US, UK, and Europe responded positively to the ceasefire news. Gains held steady after US President Donald Trump publicly urged Israel not to retaliate, following Israeli claims that Iran had violated the agreement.
Trump had earlier declared on social media that the ceasefire was “now in effect,” a move soon confirmed by Israeli authorities.
Oil prices had surged to as high as $81 a barrel since hostilities began, raising concerns about rising costs for fuel, transportation, and basic goods.
As of Tuesday, crude was trading at $69.67, just below the level it stood at on June 13, when Israel launched strikes on Iranian nuclear facilities.
“If the ceasefire holds, markets may see a return to stability in oil prices,However, the durability of this truce will be key in shaping price movements going forward,”said Priyanka Sachdeva, senior market analyst at Phillip Nova.
The price drop narrowed somewhat after Israel accused Iran of launching a missile attack in defiance of the ceasefire.
Despite the renewed tensions, equity markets remained buoyant. In the US, the S&P 500 and Dow Jones Industrial Average rose nearly 0.9%, while the tech-heavy Nasdaq climbed over 1%. The UK’s FTSE 100 gained 0.4%, Germany’s DAX rose 1.7%, and Japan’s Nikkei closed up 1.1%.
The recent conflict had sent global energy prices soaring, with fears of prolonged instability echoing the market upheaval seen after Russia’s invasion of Ukraine three years ago.
In the UK, wholesale gas prices tumbled 12.5% on Tuesday, easing concerns after recent spikes. Much of Europe’s liquefied natural gas supply passes through the Strait of Hormuz, with Qatar — a key exporter — playing a pivotal role.
Tensions flared on Monday when Iran launched missiles at a US military base in Qatar, in response to American strikes on Iranian nuclear sites.
–BBC.
Edited by Dada Ahmed.
