Oil and gas prices are surging. The market reacts to the Trump-Iran truce
Gas prices in Europe are plummeting following the announcement of a two-week ceasefire in the Middle East. The market is also reacting instantly to crude oil.
The parties to the conflict declare willingness for further peace talks.
Fot. Adobe Stock, licencja standardowa (zdjęcie poglądowe)
European gas prices (TTF) are down nearly 20 percent. On April 8, the price stands at 42 euros/MWh compared to 53 euros the previous day. Before the outbreak of the conflict, it was 31 euros. At the same time, Brent crude oil is also getting cheaper, costing $93 per barrel compared to $111 the day before. Before the conflict, the price was $73.
Trump-Iran truce. This is how the market reacts
The ceasefire agreement was announced overnight from April 7 to 8. It is set to last for two weeks. It has been accepted by the US, Iran, and Israel. One of the conditions is the full and safe opening of the Strait of Hormuz.
Price drops appeared immediately after the announcement. Previously, commodity prices had been rising due to the war that began on February 28. At one point, gas was more than twice as expensive as before the conflict. Oil also gained significantly in value. After the truce was announced, US stock markets began to rise.
Following the ceasefire announcement, changes are also visible on the currency market. The NOK is strengthening against the dollar by about 3 øre. On April 8, around 11:00, the exchange rate was 9.59 NOK per dollar. Against the euro, the NOK is slightly weakening. One euro costs 11.19 NOK.
Price drops appeared immediately after the announcement. Previously, commodity prices had been rising due to the war that began on February 28. At one point, gas was more than twice as expensive as before the conflict. Oil also gained significantly in value. After the truce was announced, US stock markets began to rise.
Following the ceasefire announcement, changes are also visible on the currency market. The NOK is strengthening against the dollar by about 3 øre. On April 8, around 11:00, the exchange rate was 9.59 NOK per dollar. Against the euro, the NOK is slightly weakening. One euro costs 11.19 NOK.
There are unconfirmed reports that Iran may have considered fees for passage through the Strait of Hormuz reaching up to $2 million per ship.Photo: pexels.com / CC0
Negotiations ongoing. The market feels uncertainty
Analysts point to uncertainty regarding the durability of the agreement. The ceasefire is temporary. There are questions about whether it can be maintained. Experts note the possible impact of falling commodity prices on the Oslo Børs, which had previously risen thanks to increasing oil and gas prices.
Iran has presented a 10-point proposal covering, among other things, ending the conflict, lifting sanctions, and rules for navigation through the Strait of Hormuz. The US has not confirmed the details of the plan. Pakistan has invited the parties for talks in Islamabad. Further negotiations on a long-term agreement are possible.
Iran has presented a 10-point proposal covering, among other things, ending the conflict, lifting sanctions, and rules for navigation through the Strait of Hormuz. The US has not confirmed the details of the plan. Pakistan has invited the parties for talks in Islamabad. Further negotiations on a long-term agreement are possible.
In the background remain issues of commodity transport through the Strait of Hormuz. There are reports of possible fees for ships that could be introduced during the truce. Decisions in this regard may affect delivery costs and further changes in energy prices on international markets.
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