Israel and Iran Agree to Ceasefire, Lowering Oil Prices by 5%
Following an agreement between Israel and Iran to stop their two-week-long dispute, oil prices fell by about 5% on Tuesday.
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Fears that Iran would block the Strait of Hormuz, a vital shipping route for the world’s gas and oil, have caused oil prices to soar over the past few days, potentially affecting global energy supply.Following U.S. President Donald Trump‘s announcement that a Israel and Iran Agree to Ceasefire “is now in effect,” with Israel later confirming its approval to the truce, stock markets throughout Asia also enjoyed increases
Israel and Iran Agree to Ceasefire
Oil prices have risen as high as $81 per barrel since the missile assaults started, which has sparked worries that growing gasoline and transportation expenses may drive up living expenses even more.
According to Phillip Nova Senior Market Analyst Priyanka Sachdeva, “investors may expect oil markets to begin stabilizing if the ceasefire holds as announced.”
“How seriously both Israel and Iran Agree to Ceasefire terms will determine the real impact on oil prices,” she continued.
Hong Kong’s Hang Seng soared 2.1% in the stock market, while Japan’s Nikkei index increased 1.1%.
In a major geopolitical development, oil prices tumbled on Tuesday following a ceasefire agreement between Israel and Iran, ending nearly two weeks of heightened tensions in the Middle Easthe . Brent crude, the international standard for oil pricing, fell to $68 a barrel—dipping beneath its value prior to Israel’s June 13 missile attacks on Iranian nuclear facilities.
The steep decline in prices comes after days of market anxiety. Traders were rattled by fears that Iran might retaliate by blocking the Strait of Hormuz, a strategic waterway through which nearly one-fifth of the world’s oil supply passes. Even a minor disturbance in that region had the potential to rattle energy markets worldwide.
Prices had surged to as high as $81 per barrel amid these concerns, raising alarms over rising fuel costs and inflationary pressure on consumers and businesses alike.
The market reacted swiftly after U.S. President Donald Trump publicly declared that the ceasefire “is now in effect,” a statement later confirmed by Israeli officials. This political breakthrough brought a sense of relief to financial markets across Asia, where stock indices responded positively to the news.
In particular, Hong Kong’s Hang Seng Index posted a strong 2.1% gain, while Japan’s Nikkei 225 climbed 1.1% during Tuesday’s trading session. Signs of easing tensions in this key oil-producing region were met with optimism from investors.
“If the ceasefire holds, we may see oil markets begin to normalize,” said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova. “However,” she added, “the actual impact on prices will depend on how strictly both sides adhere to the agreement.”
Although the immediate threat to supply appears to be easing, energy analysts caution that any breach of the ceasefire could once again send oil prices soaring.