Oil prices fall, stocks rally as US, Iran sign ceasefire deal | Oil and Gas

Brent crude fell as much as 1.6 percent, while key indexes in Japan, South Korea and Taiwan rose.

Oil prices have fallen following news that the United States and Iran signed a temporary peace deal, resuming the disruption that US President Donald Trump has warned could reignite his war campaign.

Brent crude fell as much as 1.6 percent on Thursday morning in Asia, returning the global benchmark to almost exactly where it was 24 hours earlier.

Brent futures for August were at $78.43 as of 02:00 GMT, only about 7 percent higher than before the US and Israel launched their war on Iran on February 28.

After several days of decline, Brent rose slightly to $81 a barrel on Wednesday after Trump warned that the US “could go back to bombing” Iran if it “doesn’t act”.

Major Asian stock markets opened on higher hopes for an end to nearly four months of global energy supply disruptions.

Japan’s benchmark Nikkei 225 rose 1.9 percent in early trade, the biggest hit.

South Korea’s Kospi gained more than 1 percent, while Taiwan’s Taiex rose about 1.3 percent.

Hong Kong’s Hang Seng Index moderated the trend, falling 1.7 percent.

U.S. futures, which are traded outside regular market hours and often reflect the next day’s performance, rose, with the benchmark S&P 500 and tech-heavy Nasdaq Composite rising about 0.8 percent and 1.3 percent, respectively.

Pakistani Prime Minister Shehbaz Sharif, who mediated the talks between Washington and Tehran, said on Wednesday that the US-Iran memorandum of understanding (MoU) came into effect “immediately”.

Sharif said Iran would “reopen” the Strait of Hormuz and the US would “immediately” lift the blockade of Iranian ports, although it was not clear whether the announcement had any effect on increasing maritime traffic in the critical strait.

Shipping in the strait has been reduced to a fraction of peacetime due to the threat of Iranian weapons, drones and mines, and the US blockade.

Although more than 500 ships are expected to leave the Gulf through the canal, shipping companies have complained about the lack of clarity on how to protect the safety of their ships and crew.

In a statement earlier this week, the Baltic and International Maritime Council (BIMCO), one of the world’s largest shipowners’ associations, said that the US and Iran had not yet provided information on “key issues such as timing and safe routes”.

“Due to the lack of information and a proven record of excesses, we believe that the safety of the shipping industry is not improving, and we still consider it dangerous for ships to start sailing at this time,” Jakob Larsen, head of safety and security at BIMCO, said on Monday, in response to the initial announcement of the MoU.

“We are advising ship owners to continue to assess potential incidents and asking all to prioritize the safety of seafarers.”