Arabic version: انخفاض أسعار النفط بعد توقيع الولايات المتحدة وإيران اتفاقية سلام
Oil prices have dropped following the United States and Iran’s signing of an interim peace agreement, resuming a slide interrupted by US President Donald Trump’s warning that he could restart his military campaign. Brent crude fell 2.3 percent on Thursday in Asia, returning the international benchmark to near to where it was 24 hours previously. As of 05:30 GMT, Brent futures for delivery in August stood at $77.73, only about 7 percent higher than before the US and Israel launched their war on Iran on February 28.
The Asian stock markets reacted positively, with Japan’s Nikkei 225 and South Korea’s Kospi reaching all-time highs, gaining more than 2 percent and 1.7 percent, respectively. Taiwan’s Taiex rose as much as 1.3 percent. US stock futures, which are traded outside of regular market hours and often foreshadow the next day’s performance, climbed, with those tied to the benchmark S&P 500 and the tech-heavy Nasdaq Composite climbing about 0.8 percent and 1.3 percent, respectively. According to Al Jazeera, lead economist Norihiro Yamaguchi highlighted that the signing of the memorandum of understanding (MoU) was welcomed by markets, as it occurred sooner than expected.
Pakistani Prime Minister Shehbaz Sharif, who mediated the negotiations between Washington and Tehran, said on Wednesday that the US-Iran memorandum of understanding (MoU) had entered into force with “immediate effect.” Sharif said Iran would “instantly reopen” the Strait of Hormuz and the US would “immediately” lift its naval blockade of Iranian ports, though it was not immediately clear if the announcement had any effect on boosting maritime traffic in the critical waterway. Shipping in the strait has been reduced to a fraction of peacetime levels due to the threat of Iranian missiles, drones and mines, as well as the US blockade.
Despite the optimism surrounding the MoU, market analyst Fabien Yip cautioned that practical issues, such as a backlog of vessels and the need for mine-clearing operations, will take time to resolve. More than 500 vessels are estimated to be waiting to exit the Gulf through the strait, and shipping companies have expressed concern about the lack of clarity on how to ensure the safety of their vessels and crews in the channel. The Baltic and International Maritime Council (BIMCO) has emphasized the need for detailed safety information from both the US and Iran to ensure the security of seafarers in the region.
