LONDON — Global oil prices have fallen sharply and stock markets rallied after the US and Iran agreed to a two-week ceasefire deal, with investors cheering the possible resumption of oil and gas flows through the Strait of Hormuz. The price of benchmark Brent crude fell by about 13% to $94.80 (£70.73) a barrel, while US-traded oil was more than 15% lower at $95.75. But oil prices remain higher than before the conflict started on 28 February. At the time, it was trading at around $70 a barrel. Global markets have been rattled since the US and Israel attacked Iran at the end of February, prompting Tehran to effectively close the Strait of Hormuz, a key waterway used to transit one-fifth of the world’s oil and gas. Stock markets in Europe opened higher following sharp rises in Asia. London’s FTSE 100 share index jumped by 2.53% in opening trade. In France, the Cac gained 4% while Germany’s Dazx rose by nearly 5%. Japan’s Nikkei 225 gained 5% while South Korea’s Kospi jumped nearly 6%. Hong Kong’s Hang Seng was up 2.8%, while the ASX 200 in Australia gained 2.7%. US stock market futures also pointed to a higher open for Wall Street. Futures contracts are an agreement to buy an asset for a set price at a later point in time. In the case of US stock futures, they can indicate the direction of the market before it opens. In a social media post on Tuesday evening, 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”. Iranian Foreign Minister Abbas Araghchi said on social media that Tehran will agree to a ceasefire “if attacks against Iran are halted”, adding that safe passage through the Strait of Hormuz “will be possible”. More oil tankers stranded near the strait may be able to pass through the waterway during the ceasefire, providing some relief for markets in the coming weeks, said analyst Saul Kavonic from financial services firm MST Marquee. Despite the conflict, some ships have passed through the Strait of Hormuz, although far fewer than usual.Asian countries including India, Malaysia and the Philippines have negotiated safe passage for their vessels in recent weeks. China has also acknowledged that several of its ships have crossed the strait since the war began. Kavonic said that while a ceasefire is in place, it is still unlikely that energy production in the Middle East will fully resume until there is confidence of a lasting peace deal. It could also take months for production to restart due to damage done to energy infrastructure in the region, he said. Iran has targeted energy and industrial infrastructure across the region in retaliation to the US-Israeli strikes. It could take years to fix the damage and cost more than $25 billion, according to research firm Rystad Energy. Energy prices jumped in mid-March after strikes on Qatar’s Ras Laffan industrial hub, which produces about a fifth of the world’s liquefied natural gas. The hub’s owners said the attacks have reduced the country’s export capacity by 17% and that it will take up to five years to repair the damage. Asia has been hit particularly hard by the economic fallout of the Iran war as many countries are heavily reliant on energy from the Gulf. Governments and companies across the region have announced measures in recent weeks to deal with high energy prices and fuel shortages. On 24 March, the Philippines, which imports 98% of its oil from the Middle East, became the first country to declare a national energy emergency after petrol prices more than doubled. Many airlines in the region have raised fares and cut flights in response to surging jet fuel prices. Developing countries in Asia have been especially affected by the conflict as many do not have their own refineries or sufficient oil reserves, said Ichiro Kutani from Japan’s Institute of Energy Economics. “The ceasefire is good news for Asian countries. If it holds, oil prices will return to normal states, though this will take time.” — AgenciesLONDON — Global oil prices have fallen sharply and stock markets rallied after the US and Iran agreed to a two-week ceasefire deal, with investors cheering the possible resumption of oil and gas flows through the Strait of Hormuz. The price of benchmark Brent crude fell by about 13% to $94.80 (£70.73) a barrel, while US-traded oil was more than 15% lower at $95.75. But oil prices remain higher than before the conflict started on 28 February. At the time, it was trading at around $70 a barrel. Global markets have been rattled since the US and Israel attacked Iran at the end of February, prompting Tehran to effectively close the Strait of Hormuz, a key waterway used to transit one-fifth of the world’s oil and gas. Stock markets in Europe opened higher following sharp rises in Asia. London’s FTSE 100 share index jumped by 2.53% in opening trade. In France, the Cac gained 4% while Germany’s Dazx rose by nearly 5%. Japan’s Nikkei 225 gained 5% while South Korea’s Kospi jumped nearly 6%. Hong Kong’s Hang Seng was up 2.8%, while the ASX 200 in Australia gained 2.7%. US stock market futures also pointed to a higher open for Wall Street. Futures contracts are an agreement to buy an asset for a set price at a later point in time. In the case of US stock futures, they can indicate the direction of the market before it opens. In a social media post on Tuesday evening, 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”. Iranian Foreign Minister Abbas Araghchi said on social media that Tehran will agree to a ceasefire “if attacks against Iran are halted”, adding that safe passage through the Strait of Hormuz “will be possible”. More oil tankers stranded near the strait may be able to pass through the waterway during the ceasefire, providing some relief for markets in the coming weeks, said analyst Saul Kavonic from financial services firm MST Marquee. Despite the conflict, some ships have passed through the Strait of Hormuz, although far fewer than usual.Asian countries including India, Malaysia and the Philippines have negotiated safe passage for their vessels in recent weeks. China has also acknowledged that several of its ships have crossed the strait since the war began. Kavonic said that while a ceasefire is in place, it is still unlikely that energy production in the Middle East will fully resume until there is confidence of a lasting peace deal. It could also take months for production to restart due to damage done to energy infrastructure in the region, he said. Iran has targeted energy and industrial infrastructure across the region in retaliation to the US-Israeli strikes. It could take years to fix the damage and cost more than $25 billion, according to research firm Rystad Energy. Energy prices jumped in mid-March after strikes on Qatar’s Ras Laffan industrial hub, which produces about a fifth of the world’s liquefied natural gas. The hub’s owners said the attacks have reduced the country’s export capacity by 17% and that it will take up to five years to repair the damage. Asia has been hit particularly hard by the economic fallout of the Iran war as many countries are heavily reliant on energy from the Gulf. Governments and companies across the region have announced measures in recent weeks to deal with high energy prices and fuel shortages. On 24 March, the Philippines, which imports 98% of its oil from the Middle East, became the first country to declare a national energy emergency after petrol prices more than doubled. Many airlines in the region have raised fares and cut flights in response to surging jet fuel prices. Developing countries in Asia have been especially affected by the conflict as many do not have their own refineries or sufficient oil reserves, said Ichiro Kutani from Japan’s Institute of Energy Economics. “The ceasefire is good news for Asian countries. If it holds, oil prices will return to normal states, though this will take time.” — Agencies
