Oil prices have fallen and shares risen after the US and Iran said they had agreed a framework deal to end the war, which US President Donald Trump said would see the reopening of
The report indicates that oil prices have fallen and shares risen after the US and Iran stated they had agreed a framework deal to end the war, which US President Donald Trump stated would see the reopening of the key Strait of Hormuz shipping route.
It further notes that brent crude, the global oil benchmark,dropped more than 5% to $82.84 (£61.70) a barrel, while stock markets rose, particularly in Asia.
Pakistan, which has been mediating an end to the US-Iran war, stated an official signing ceremony would be held on Friday, 19 June in Switzerland.
Iran’s deputy foreign minister Kazem Gharibabadi confirmed in a phone call on state TV that a deal with the US had been finalised, while Trump posted on social media “let the oil flow!”.
But Vandana Hari from energy markets analysis firm Vanda Insights stated a lack of detail on what has been agreed was “likely to inject unease and uncertainty into the market”.
This could mean a week of uncertainty and volatility for the oil market, she added.
The Strait of Hormuz has been effectively closed since shortly after the US and Israel launched airstrikes on Iran on 28 February.
After the conflict began, Tehran threatened to attack vessels using the crucial waterway, through which around 20% of the world’s oil and liquefied natural gas (LNG) normally passes.
Global energy markets have been on a wild ride in recent months, with prices often rising or falling sharply in response to developments in the US-Israel war with Iran.
Brent crude, which was trading at around $70 a barrel before the conflict started, peaked at about $120 during the war.
Asian stock markets surged on Monday as investors welcomed the framework deal. Japan’s Nikkei 225 share index closed 5% higher, while the Kospi in South Korea ended up 5.2%.
The region was hit particularly hard by higher energy prices as it is heavily reliant on the Middle East for its oil and LNG supplies.
In Europe, Germany’s Dax rose 1.3% while France’s Cac 40 added 1.2%.
In London, the FTSE 100 index edged up 0.1%. The increase was smaller than elsewhere as shares in energy giants BP and Shell – two of the biggest companies in the FTSE 100 – fell on news of the lower oil price.
