European gas prices drop sharply amid news of US-Iran peace deal
US and Iranian officials announced a permanent agreement to end their conflict, including the immediate reopening of the Strait of Hormuz and the lifting of the US blockade on Iranian ports, leading to a sharp drop in European gas prices. The deal, set for formal signing in Geneva on Friday, includes a ceasefire in Lebanon but excludes Israel’s continued presence there, while Hizbullah welcomed the comprehensive ceasefire terms.
US and Iranian officials confirmed a permanent agreement to end their war, with the Strait of Hormuz set to reopen immediately. The deal, brokered with Pakistan overseeing the signing ceremony in Geneva on Friday, also includes Donald Trump’s order to lift the US blockade on Iranian ports. Military operations, including in Lebanon, will cease permanently from Monday night, though Israel stated it will maintain its presence in Lebanon. Hizbullah welcomed the agreement, calling it a comprehensive ceasefire. The reopening of the Strait of Hormuz has already triggered a sharp decline in European gas prices, which had surged over 50% following US and Israeli attacks on Iran. The International Monetary Fund (IMF) noted that while the global economy has so far withstood the shock of the Middle East conflict, risks remain high due to prolonged disruptions in the Strait of Hormuz and damaged infrastructure. IMF Managing Director Kristalina Georgieva cautioned that uncertainty persists despite the agreement. US stock markets rallied on the news, with the Dow Jones Industrial Average climbing 1.25%, the S&P 500 up 1.5%, and the Nasdaq Composite rising 2.25%. Energy sector stocks, however, fell sharply, with Chevron down 3.15% and Exxon Mobil dropping 3.7% as oil price expectations eased.
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