From Plunge to Partial Recovery: Oil Reacts to Fragile Mideast Peace

Oil prices experienced a dramatic shift, moving from a sharp plunge to a partial recovery, as the market reacted to the fragile nature of the declared Middle East peace between Israel and Iran. Brent crude, the global benchmark, illustrated the immediate impact of geopolitical developments.
The initial steep decline in Brent crude was a direct consequence of Donald Trump’s announcement of a “complete and total ceasefire.” However, this positive sentiment was quickly tempered by reports of continued hostilities, including Israel’s claims of fresh Iranian missile attacks.
This rapid price reversal highlights the ongoing “war premium” in oil prices, which remains highly sensitive to geopolitical developments in the Middle East. While some de-escalation hopes led to an initial dip, the quick recovery suggests that traders are highly cautious and will react strongly to any signs of continued conflict.
Global stock markets, including those in London and Germany, generally reacted positively to the initial ceasefire news. Travel and airline stocks were particularly buoyed, although some airlines maintained flight suspensions to the Middle East, indicating lingering safety concerns.