Oil Reverses Course After US-Iran Ceasefire 

Financial markets staged a sharp reversal today after the United States and Iran announced a two-week ceasefire in their conflict. The agreement, brokered with Pakistani mediation and endorsed by both sides, calls for an immediate halt to military strikes, a phased reopening of the Strait of Hormuz to commercial shipping, and the start of direct talks toward a longer-term deal. The news lifted the immediate threat of escalation and delivered a much-welcomed wave of relief through to risk assets. 

With the Strait of Hormuz set to reopen, oil prices reversed course sharply on the prospect of barrels once again moving freely through the Persian Gulf. This sudden easing of global supply pressures has been a clear boon for stocks, removing a major inflationary headwind and lifting risk sentiment across the board. With roughly one-fifth of global seaborne oil passing through the chokepoint, the prospect of normalised tanker flows has rapidly drained the geopolitical risk premium that had kept prices elevated. Oil led the retreat, with Brent crude dropping more than 8% in early Asian trading, while WTI fell sharply also.