12 hours Ago
Earlier concerns about potential supply disruption had sent prices to as much as $81 a barrel, particularly on worries that Iran could block the Strait of Hormuz, a crucial conduit for global oil and gas transportation. The price spike had prompted fears of increasing costs for petrol, diesel and businesses around the world.
Market reaction and International Impact
Markets reacted positively to the news. The FTSE 100 in the UK was up 0.4% in early trading, the CAC-40 in France 1.4% and Germany's DAX 2%. In Asia, Japan's Nikkei was up 1.1 per cent and Hong Kong's Hang Seng gained 2.1 per cent. The ceasefire prompted investors to see a possible return of stability to energy markets.
"If this ceasefire is maintained, the markets can look for normalisation in oil prices. But she cautioned that the ultimate result depends on how stringently Israel and Iran follow the peace.
The price decline was trimmed in later trading after Israel accused Iran of breaking the accord by firing a missile, after some initial euphoria. Trump called on both countries to refrain from violating the truce, which Israel's government said it accepted after "the elimination of the Iranian nuclear threat."
Energy Prices and the Consumer
The conflict had caused global energy costs to spike, sparking fears that sustained chaos would push up household bills and the cost of transport. UK wholesale gas prices fell 12.5% on Tuesday, unwinding recent gains. Qatar, a significant shipper of liquefied natural gas, is a linchpin in that market and vessels that transport that gas sail through the Strait of Hormuz.
That cease-fire followed an Iranian missile attack on Monday on a United States base in Qatar, in revenge for earlier American airstrikes against its nuclear facilities. The rising price of oil echoed the global economic consequences of Russia's invasion of Ukraine three years ago and raised concerns about higher living costs around the world.
