Oil plunges after US-Iran ceasefire deal to reopen Strait of Hormuz
Global oil prices have fallen sharply and stock markets have jumped after the US and Iran agreed to a conditional two-week ceasefire deal that includes the reopening of the key Strait of Hormuz waterway.
The price of benchmark Brent crude fell by about 13% to $94.80 (£70.73) a barrel, while US-traded oil was more than 15% lower at $95.75.
But oil prices remain higher than before the conflict started on 28 February. At the time, it was trading at around $70 a barrel.
The cost of energy has jumped as oil and gas supplies from the Middle East have been severely disrupted after Iran threatened to attack ships trying to use the strait in retaliation to US and Israeli airstrikes.
Major stock indexes in the Asia-Pacific region rose on Wednesday morning.
Japan’s Nikkei 225 gained by 5% while South Korea’s Kospi jumped by nearly 6%. Hong Kong’s Hang Seng was up by 2.8%, while the ASX 200 in Australiagained 2.7%.
US stock market futures also pointed to a higher open for Wall Street.
Futures contracts are an agreement to buy an asset for a set price at a later point in time. In the case of US stock stock futures they can indicate the direction of the market before it opens.
