Oil falls, stocks rise after US-Iran ceasefire reopens Strait of Hormuz
Under the agreement, President Donald Trump said, "I agree to suspend the bombing and attack of Iran for a period of two weeks... subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz."
A conditional two-week ceasefire between the United States and Iran has led to the reopening of the Strait of Hormuz, easing concerns over global energy supplies and pushing oil prices lower.
Brent crude fell 15.9% to $92.30 a barrel, while US-traded oil dropped 16.5% to $93.80 after the announcement. Prices remain above the roughly $70 per barrel level seen before the conflict began on 28 February, says the BBC.
Under the agreement, President Donald Trump said, "I agree to suspend the bombing and attack of Iran for a period of two weeks... subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz."
Keep updated, follow The Business Standard's Google news channel
Iran signalled conditional acceptance of the truce. Foreign Minister Abbas Araghchi said Tehran would agree to a ceasefire "if attacks against Iran are halted," adding that safe passage through the waterway "will be possible."
Asian financial markets rose following the development, with Japan's Nikkei 225 gaining 4.5% and South Korea's Kospi jumping 5.5%.
The ceasefire follows weeks of disruption to global energy markets. The Philippines declared a national energy emergency on March 24 after petrol prices doubled, while migrant workers in India were forced to leave cities due to shortages of cooking gas.
Analysts said economic considerations may have played a role in the agreement. Xavier Smith of AlphaSense said Trump was likely wary of allowing energy prices to "skyrocket," risking a "self-inflicted economic wound."
Trump's rhetoric during the conflict also drew criticism. He had threatened that "a whole civilisation will die tonight" if a deal was not reached by his deadline, prompting concern from the United Nations. The UN chief was reported to be "deeply troubled" by the remarks.
While the reopening of the Strait of Hormuz has provided short-term relief to markets, analysts said the events surrounding the ceasefire could have longer-term implications for perceptions of the United States globally.
