After the agreement was announced, the stock market reacted with a sharp decline in black gold quotations. This was the biggest one-day drop in oil prices since the 1991 Gulf War.
About it writes Axios. As the publication notes, futures for Brent crude oil, which is the global benchmark, fell in price by about 16% – to about 93 dollars per barrel. At the same time, this figure remains significantly above the level of about 73 dollars per barrel, which was fixed before the war began in late February.
However, not everything is so unambiguous. After Iran agreed to the “full, immediate and safe opening of the Strait of Hormuz” Iranian Foreign Minister Abbas Araghchi said that within two weeks safe passage through the strait would be ensured in coordination with the Iranian Armed Forces with “due regard to technical constraints”.
De-escalation and respite?
Analysts warn that a permanent end to the war will depend on how the talks go. Israel has said it supports the cease-fire but did not extend it to Lebanon, which came under renewed shelling on Wednesday.
Iran’s Supreme National Security Council said talks with the United States would begin Friday in Islamabad on a 10-point plan that calls for Tehran to retain control of shipping in the Strait of Hormuz and lift economic sanctions.
“Markets will be able to breathe a sigh of relief for at least a few days,” said Michael Alfaro, chief investment officer at U.S. hedge fund Gallo Partners.
However, investors warned that a further drop in oil prices will depend on whether Iran is willing to loosen its grip on the Strait of Hormuz after the two-week deadline.
In a post on social media site Truth Social on Wednesday, Trump said the U.S. would “help with organizing traffic” in the strait, adding that “a lot of money” could be made from it.
Gas prices have also collapsed
Gas prices collapsed by 20% after the truce. Exchange prices for natural gas in Europe began trading on Wednesday with a collapse. The cost of May futures for natural gas at the TTF hub in the Netherlands plummeted by 20.18% to a low of €42.5 per 1 MWh, or $521.7 per 1,000 cubic meters at current forex rates. That was the biggest daily drop in more than two years, Bloomberg calculated.
