"Disaster Averted" – From Fear to Stability as Oil Plunges 14% and Stocks Rebound [U.S.–Iran Two-Week Ceasefire]

The United States and the Islamic Republic of Iran abruptly agreed to a two-week ceasefire on the 7th (local time), pulling global financial markets out of panic and back toward rapid stability. As the risk of a blockade in the Strait of Hormuz, which had been choking the world economy since the outbreak of hostilities, eased for now, international oil prices plunged below 100 dollars per barrel, and stock markets around the world rebounded in unison. However, analysts noted that the move amounts to a conditional reopening premised on Iran retaining control, leaving market tensions still running high.
On the same day at the New York Mercantile Exchange (NYMEX), West Texas Intermediate crude oil (WTI) for May delivery closed at 96.45 dollars per barrel, a sharp drop of 14.2% from the previous session. Immediately after U.S. President Donald Trump announced his agreement to the ceasefire, oil prices briefly tumbled to the 91‐dollar level before recovering somewhat, but they ultimately finished the session below the 100‐dollar mark.
At ICE Futures Europe in London, June Brent crude oil futures also fell, ending the session at 94.12 dollars per barrel, down 13.8% over the same period. For both benchmarks, it was the first time since the early days of the conflict on the 2nd that closing prices had dropped below 100 dollars.
With risk appetite returning, New York stock index futures also strengthened. Dow Jones Industrial Average (DJIA) futures were up 1.87%, S&P 500 futures gained 2.12%, and Nasdaq-100 (NDX) futures were up 2.79%, all maintaining solid gains. In contrast, spot gold, a traditional safe-haven asset, slipped below 2,100 dollars per ounce and turned lower.
Market indicators may be stabilizing, but experts cautioned that many hurdles remain before the real economy can fully normalize. Helima Croft, global head of commodity strategy at RBC Capital Markets, said in an interview with CNBC, "The market is breathing a sigh of relief for now, but if the full reopening of the Strait of Hormuz means Iranian military inspections and the collection of transit fees, it is hard to regard that as true freedom of navigation."
In this context, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), also stated the previous day, "Even if the war is resolved quickly from here and the recovery is swift, the IMF plans to revise down its growth forecasts and revise up its inflation outlook." Analysts pointed out that once supply chains are severed, reconnecting them takes at least two weeks of physical time—from allocating tankers to securing insurance approvals—so a two‐week ceasefire is too short for additional oil to meaningfully reach the market. Axios, a U.S. political news outlet, reported, "Officials at the White House see this ceasefire as a narrowly secured temporary off-ramp at the brink of escalation," adding, "As long as the fundamental thorn of uranium enrichment remains, armed conflict could flare up again at any time."
whywani@fnnews.com Hong Chae-wan Reporter