Ceasefire Between U.S. and Iran Triggers Sharp Oil Price Drop, Lifts Global Markets

A temporary de-escalation in tensions between the United States and Iran has brought notable to global energy markets, following a two-week ceasefire agreement tied to the reopening of the Strait of Hormuz. In response, international oil prices dropped sharply, with benchmark Brent crude falling by around 15.9 percent to $92.30 per barrel, while U.S. crude declined approximately 16.5 percent to $93.80 per barrel. Despite this significant decrease, prices remain higher than pre-conflict levels in late February. The earlier surge in energy costs had been driven by Iran’s threat to target vessels passing through the strategic waterway, raising fears of severe disruptions to oil and gas supplies from the Middle East. The easing of tensions has also lifted investor sentiment, with major Asia-Pacific stock indices posting strong gains, including Japan’s Nikkei 225 and South Korea’s Kospi. Former U.S. President Donald Trump indicated willingness to halt military actions if Iran ensured safe and immediate reopening of the strait, while Iran signaled readiness for a ceasefire provided attacks against it ceased. The recent volatility has had widespread economic repercussions, particularly across Asia, where countries heavily reliant on Middle Eastern energy have faced fuel shortages and soaring prices. The Philippines, for instance, declared a national energy emergency after petrol prices more than doubled, while rising jet fuel costs have forced airlines across the region to increase fares and cut flights.