Oil prices curtail loss amid suspicions of Israel and Iran’s ceasefire

Khon’s tankers look at the Termeer in the container, the streets of Hormuz.Photo: Giuseppe Cacace/AFP/Getty Images

Oil prices have curtailed reverse losses after the sudden fall caused by Donald Trump’s declaration of a ceasefire between Israel and Iran was tempered by doubts that a ceasefire would occur.

Donald Trump I wrote it On the truth social platform on Tuesday morning: “It is fully agreed that there is a completely complete and complete ceasefire between Israel and Iran.” Israel has since confirmed that it “consent” the proposal.

In response, global benchmark Brent crude fell on the second day, initially falling more than 5%, falling to $67.65 (£49.83) per barrel after a 7% fall on Monday.

Related: Strait of Hormuz: How can Iran close it and why is it important to global trade?

However, prices traded 3% lower at $69.21 per barrel later on Tuesday, the lowest since June 12th. Israeli forces said they detected another Iranian barrage of missiles. Hours after the start of a ceasefire rejected by Iranian media, Reuters reported. Israeli Defense Minister Israel Katz said Israel would respond “strongly.”

Financial markets have been lifted by news of a ceasefire. In London, the FTSE 100 rose 0.3%, while Germany’s DAX rose almost 2%. In Asia, Japan’s Nikkei rose 1.1%, while Hong Kong’s Hangsen rose 2.1%.

“We’ve seen a lot of effort into this new business,” said Kathleen Brooks, research director at XTB. “The agreement seemed solid at first, but this is still a very fluid situation. The IDF (Israel Defence Force) announced this morning that the missile had been fired from Iran at Israel.

“Brent Crude has won nearly 20% over the past month. This now has a war premium on oil prices, which is unlocked. But with more indications that a ceasefire is not held, we can see oil prices reopening the upward trend.”

Airlines and travel inventory rose on ceasefire news, with shares in Air France KLM, British Airways owner IAG, Hungary’s Wiz Air and Germany’s Luftanza rising 5% to 8% in early trading. Europe’s largest travel operator, TUI, rose 8%, while InterContinental Hotels rose 3.5%, and French hospitality company Accor rose 6%.

The airline continues to halt several flights to the Middle East due to safety concerns despite news of a ceasefire. BA suspended all flights until June 25th to Doha, while Budget Career With Air cancelled flights to and from the United Arab Emirates until June 30th.

British travel agency Saga reported that its ocean and river cruises had a strong start until this year, saying it was not affected by the Middle East conflict. They do not offer cruises to the area and only sell holidays to Jordan and Egypt.