Global Markets Rally as US and Iran Agree to Temporary Ceasefire

Crude oil benchmarks saw a sharp correction on Wednesday as news broke that US President Donald Trump had reached a two-week ceasefire agreement with Iran. The move sparked immediate hopes that the Strait of Hormuz, a critical chokepoint for global energy, would reopen to commercial traffic. The conflict had previously triggered the largest oil supply shock on record, removing an estimated 12 million to 15 million barrels of crude per day from the market. Following the announcement, WTI tumbled nearly 16% to $95 per barrel, while Brent crude fell 14% to $93.8 per barrel. Despite the price drop, analysts warn that the ceasefire is fragile. A primary point of contention is the proposal by Iran and Oman to implement transit fees for tankers. Such fees, estimated at $1-2 million per vessel, could add roughly $1 per barrel to costs and are viewed by Western allies as a potential funding source for the IRGC, a designated terrorist organization. The geopolitical de-escalation triggered a broad relief rally across global equity markets. Asia saw significant gains, with South Korea’s Kospi rising 6.87% and Japan’s Nikkei climbing 5.39%. European indices followed suit, with Germany’s Dax jumping 4.6%, while US Dow futures surged by 1,200 points. Shipping data indicates a massive backlog, with 187 tankers carrying 172 million barrels of oil currently stranded in the Gulf. While some vessels have begun transiting, the full clearance of this backlog is expected to take time, and the temporary nature of the ceasefire leaves long-term energy stability in question.