OIL prices have tumbled by nearly 14 per cent and Spain’s stock market has jumped up by 4.2 per cent after the US and Iran agreed to a two-week ceasefire.
Despite President Trump’s earlier threats on his social media platform to destroy Iran’s ‘whole civilization,’ the US and Iran have agreed to a conditional two?week ceasefire deal brokered by Pakistan.
The American President agreed to a ten-point truce proposal presented by Iran, requiring US military withdrawal from the Middle East and an end to attacks on Iran and its allies.
READ MORE: Spain’s Pedro Sanchez welcomes Iran war ceasefire but fires broadside at Donald Trump
Tehran has also said that for the next two weeks, starting from April 9 or 10, ships will be allowed to pass through the Strait of Hormuz, under the supervision of Iran’s military.
The ceasefire stipulates that Iran will retain control of the Strait of Hormuz, a vital chokepoint through which one-fifth of the world’s oil and gas flows.
Pakistan acted as an intermediary in brokering the deal between the two countries, and Prime Minister Shehbaz Sharif announced that peace talks would begin in Islamabad on April 10.
READ MORE: Spain calls for windfall tax on energy firms as Iran war sends fuel prices soaring
The deal was welcome news for oil prices and international stock markets which have been rattled by the conflict.
After the news broke, Brent crude oil, one of the key benchmarks for global oil prices, fell by 13.9 per cent to $94.10 per barrel, well below the $119 peak on 31 March.
Meanwhile, Spain’s principal stock market, the IBEX 35, increased by 4.2 per cent mirroring a global trend.
The pan-European Stoxx 600 index, which tracks the 600 of Europe’s biggest companies, gained 4 per cent while the UK’s FTSE 100 jumped up by almost 3 per cent.
Travel companies, which have faced rising fuel costs during six weeks of war, saw their stocks surge after the announcement.
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Air France’s shares increased by 14.5 per cent, Lufthansa shares rose by 11 per cent while British Airways owner IAG climbed 9.5 per cent, and holiday group TUI gained nearly 12 per cent.
In Spain, the ceasefire could spell cheaper prices at the pumps and more stable stocks.
However, with ships passing through the Strait of Hormuz requiring permission from Iran and Pakistan’s Prime Minister claiming there have been ‘violations of the ceasefire’, it is not yet business as usual.
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