Oil prices fell significantly in the international market on hopes of a possible peace deal between the United States and Iran. At the same time, positive trends have been seen in stock markets around the world. According to analysts, the prospect of a resolution to the ongoing conflict has created optimism among investors.
Global benchmark Brent crude fell 1.3 percent to $91.54 per barrel on Friday. Brent has fallen nearly 17 percent since the start of May, in what is seen as one of the biggest declines in recent memory. On the other hand, the price of the US benchmark West Texas Intermediate (WTI) crude fell 1.4 percent to 87.64 dollars per barrel. At the beginning of the week, its price rose to 94.70 dollars.
According to the report of the UK-based newspaper The Guardian, this positive attitude in the market has been created after the initiative of the US President Donald Trump to send a draft of a peace agreement to the allied countries on the Iran war.
The US and Iran have reached a preliminary agreement to extend the ceasefire for 60 days, according to US news outlet Axios. But Trump has not yet officially agreed to it. US Vice President JD Vance said the deal was close, though not yet final.
The Iran war that has been going on for the past 90 days has created major instability in the world economy. Iran’s blockade of the Strait of Hormuz has disrupted large volumes of oil exports from the Gulf region. As a result, pressure is created in energy markets and inflationary concerns increase.
On the current situation, Deutsche Bank analyst Henry Allen said, there is increasing optimism about the end of the conflict in the market. Investors feel that the risk of stagnation and inflation in the global economy has also decreased due to the reduction in oil prices.
Meanwhile, Asia’s stock market has seen a big rise. Japan’s Nikkei index rose 2.5 percent and South Korea’s Kospi rose 3.6 percent. The positive trend continues in the markets of Europe and the United States.
