ISLAMABAD: A ceasefire between the United States and Iran, facilitated through Pakistan’s diplomatic efforts, has triggered a sharp fall in global oil prices and a surge in stock markets, reflecting investor optimism over easing tensions in a region critical to global energy supplies.
According to reports by CNN and France 24, oil prices dropped significantly after US President Donald Trump agreed to a two-week ceasefire with Iran, raising hopes that the strategically vital Strait of Hormuz will reopen fully. The waterway, through which around one-fifth of the world’s oil passes, had been effectively disrupted during weeks of conflict, fuelling fears of a major supply shock.
US crude futures fell by more than 15 per cent to below $95 per barrel, while Brent crude, the global benchmark, dropped by nearly 13 per cent. Analysts described the decline as a strong market response to signs of de-escalation, although prices remain above pre-conflict levels.
Equity markets also reacted positively. Dow futures jumped by over 900 points, while S&P 500 and Nasdaq futures rose more than two per cent. Across Asia, Japan’s Nikkei index surged nearly five per cent, South Korea’s Kospi gained over five per cent, and Hong Kong’s Hang Seng index recorded solid gains, underlining renewed global risk appetite.
Immediate ceasefire
The market rally follows a diplomatic push led by Pakistan, which played a key role in facilitating communication between Washington and Tehran. Prime Minister Shehbaz Sharif confirmed that both sides, along with their allies, had agreed to an immediate ceasefire “everywhere”, including Lebanon, with Islamabad set to host further negotiations aimed at a comprehensive peace agreement.
Trump said the ceasefire was linked to Iran’s commitment to reopen the Strait of Hormuz, describing a 10-point proposal from Tehran as a “workable basis” for talks. Iran, while confirming the truce, indicated it remains temporary and subject to further negotiations.
Despite the positive market reaction, analysts caution that uncertainty remains over the long-term status of the Strait of Hormuz and whether the ceasefire will lead to a lasting resolution. The conflict had already caused one of the largest oil supply disruptions on record, affecting up to 15 million barrels per day.
Pakistan’s role in mediating the ceasefire has been widely seen as a significant diplomatic achievement, contributing not only to regional de-escalation but also to stabilising global energy markets and restoring confidence among investors worldwide.
Key figures
West Texas Intermediate: DOWN 14.0 percent at $97.12 a barrel
Brent North Sea Crude: DOWN 13.2 percent at $94.86 a barrel
Tokyo – Nikkei 225: UP 5.3 percent at 56,270.90
Shanghai – Composite: UP UP 2.9 percent at 25,843.29
Hong Kong – Hang Seng Index: UP 1.5 percent at 3,946.47
Euro/dollar: UP at $1.1685 from $1.1585 on Tuesday
Pound/dollar: UP at $1.3413 from $1.3274
Dollar/yen: DOWN at 158.36 yen from 159.70 yen
Euro/pound: DOWN at 87.11 pence from 87.28 pence
New York – Dow: DOWN 0.2 percent at 46,584.46 (close)
London – FTSE 100: DOWN 0.8 percent at 10,348.79 (close)
