A two-week ceasefire between the US and Iran has been announced, leading to immediate market reactions as oil prices fell sharply and stock indices rallied globally. Brent crude oil fell to around $95 per barrel, with Axios reporting this as the largest drop since the Gulf War in 1991. Gold prices rose about 2% to over $4,800 per ounce, according to multiple reports, while Asian stock markets rose broadly, including gains in South Korea's Kospi and Japan's Nikkei. European futures pointed to gains of around 4-5%, and Stockholm's stock market is expected to rise when trading opens, multiple reports indicate. However, US stocks swung sharply during trading due to uncertainty, with the S&P 500 ending with a modest gain of 0.1%, according to multiple sources. London's FTSE 100 index ended the day flat after being down more than 2% earlier on Monday, according to reports. In the US, the S&P 500 index rose more than 1.1%, according to reports. The Oslo stock exchange fell around 2.7% at the start of trading, with oil stocks like Equinor and Vår Energi falling 12% and Aker BP falling 10%, according to multiple sources.
The ceasefire includes opening the Strait of Hormuz, according to multiple reports, which could ease fears over a supply crunch as it carries a fifth of global oil and gas supplies. Iran and Oman plan to charge fees from ships passing through the strait during the two-week ceasefire, earmarked for reconstruction, CNN reported. The strait has effectively been closed since the war began, with Iran reported to have charged up to $2 million per ship for passage, and only about 5% of normal shipping volume has passed through, multiple sources said. Some tankers have been able to pass after negotiations, such as Pakistan and India negotiating with Iran for safe passage for some ships, but about 800 ships are still stuck in the Persian Gulf, and there is little information on how traffic will resume. The closure triggered the worst energy crisis of the modern era, but the situation remains volatile with conflicting messages from Tehran and Washington about whether Hormuz is open, according to multiple reports.
Political context and diplomatic statements have shaped the ceasefire, with Israel continuing to strike Lebanon, multiple reports indicate. The ceasefire was announced after Pakistan's prime minister urged Trump to extend his deadline and asked Iran to open the strait, and market activity was driven by Donald Trump announcing he would hold off on threats of devastating attacks on Iran, subject to Iran agreeing to open the Strait of Hormuz. Trump had previously threatened strikes on Iranian civilian infrastructure, according to multiple sources. The comments over the weekend had rattled financial markets, adding to fears that the US-Israeli war with Iran would be a prolonged conflict, according to reports. At one point on Monday, the price of Brent had hit $113 a barrel, but it tumbled in the immediate aftermath of Trump's latest comments, according to reports. Stocks in Asia, which closed before Trump's latest comments, had seen heavy falls, according to reports. Japan and South Korea have been particularly affected by the conflict, as they are heavily dependent on oil and gas that would normally pass through the Strait of Hormuz, according to reports. Since the war began on 28 February, Iran has effectively blocked the Strait of Hormuz, according to reports. About 20% of the world's oil and liquefied natural gas usually passes through the Strait of Hormuz, according to reports.
The time after the ceasefire could be 'the Middle East's golden age' and called it a great day for world peace.
Economic impact and inflation concerns persist despite the ceasefire, as consumers are feeling the pinch from energy prices higher than before the war, multiple reports indicate. Brent crude remains above $90 per barrel, significantly higher than before the war when it traded below $73, and most economists forecast oil prices will remain above pre-war levels throughout 2026. Capital Economics predicts oil prices will decline but end the year at $80 per barrel, with inflation rising to 3-4% in the US and Europe, and economists say the unpredictability of Iran and Trump adds to uncertainty and risk. Petrol prices in the UK have risen by around 25p per litre and diesel by around 50p per litre since the war began, with the average price of unleaded at 157.71p per litre and diesel at 190.62p per litre, the most expensive since late 2022, according to multiple sources. The pound rose 1% to $1.342, its highest since 23 March and just 0.4% below pre-conflict levels, while money markets scaled back expectations for interest rate hikes, with the Bank of England now expected to hike only once in 2026, and against the euro, the pound was marginally stronger. Oil price was $110.40 per barrel when Oslo stock exchange closed on Tuesday, and global oil production has fallen by about 11 million barrels per day, according to Kpler, with the peak of acute uncertainty probably passed, and oil prices likely to remain higher than pre-war for several months, multiple reports indicate.
Analysts are cautious, with Jefferies seeing several potential paths forward, from a frozen conflict to renewed escalation, and analysts said the market reaction reflected relief at easing immediate risks, but sentiment remained cautious, according to multiple sources.
Personal impact on consumers and businesses is significant, with Ulf, a farmer, experiencing higher gasoline prices that have recently started to decrease somewhat after the ceasefire, according to official sources. Gasoline previously cost around 15 kronor per liter, but prices are significantly higher today, and for Ulf, it becomes a direct cost in everyday life, a sentiment he shares with many others dependent on fuel in their work.
I promised the US would help with the traffic congestion in the Strait of Hormuz.
The US administration's position claims victory, with White House press secretary Karoline Leavitt calling the two-week ceasefire 'a victory for the USA' and saying the US has achieved and exceeded its central military goals in 38 days. Leavitt said the ceasefire created an opening for a diplomatic solution and long-term peace.
Iran's official statements and ceasefire conditions were outlined by Iranian foreign minister Abbas Araghchi, who announced that Iran's armed forces would cease defensive operations, but this does not signify the end of the war.
Trump's statements about negotiations and military threats include him saying the US would hold off on strikes against Iranian power plants, citing 'constructive' discussions about ending the conflict in the Middle East, according to research. Trump wrote on social media that the US and Iran had held talks about a 'COMPLETE AND TOTAL' resolution, and he had previously said he would 'obliterate' Iranian power plants if the Strait of Hormuz shipping route was not reopened in 48 hours. In a Monday morning post on Truth Social, Trump said the US and Iran had held talks over the weekend about 'a complete and total resolution of our hostilities', and based on the 'tenor and tone of these in depth, detailed and constructive conversations' he had instructed the military to postpone any strikes for five days, subject to the success of ongoing meetings and discussions. Iran had said it would respond by targeting key infrastructure in the region, research indicates.
Iran's denial of negotiations and accusations of misinformation were issued by Iran's foreign ministry, which denied what Trump said regarding negotiations taking place between the US and Iran, according to research. Mohammad-Bagher Ghalibaf, speaker of Iran's parliament, wrote on X that no negotiations have been held with the US, and fakenews is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped.
Unknowns remain, including whether the Strait of Hormuz is currently open to normal shipping traffic and the exact terms and duration of the ceasefire beyond the initial two weeks. It is unclear how many ships have paid the fees charged by Iran for passage, and the long-term impact on global oil prices and inflation beyond 2026 is uncertain, as are the prospects for a lasting peace agreement between the US and Iran after the ceasefire.