On Monday, June 22, crude oil prices dropped as investors cheered indications that negotiations between the US and Iran were making forward, with mediators unveiling a roadmap for a final deal.
Fears of additional disruption in the Middle East, especially in the vicinity of the Strait of Hormuz, a vital waterway that transports roughly a fifth of the world’s oil and gas, were allayed by the development.
In midday Asian trade, both major oil prices fell, with Brent crude down by more than 1%.
Brent North Sea crude dropped 1.7% to $79.19 per barrel, while West Texas Intermediate crude dropped 0.6% to $75.37 per barrel.
According to Naija News, violence between Israel and Hezbollah caused the negotiations, which were originally set for Friday, to be postponed.
Later, on Sunday, they began in Switzerland, with teams headed by Iran’s Mohammad Bagher Ghalibaf and US Vice President JD Vance.
Earlier, there were worries that Iran may have canceled the negotiations after US President Donald Trump threatened to carry out additional strikes if Hezbollah persisted in attacking Israel.
The talks, according to mediators Pakistan and Qatar, took place in “a positive and constructive atmosphere.”
Following Qatar and Pakistan’s announcement of progress in the negotiations, which are intended to resolve Tehran’s nuclear program and reopen the Strait of Hormuz, the mood in the markets improved.
According to the mediators, the US and Iran had decided to create a “communication line” in order to avoid mishaps in the vital waterway.
“The High Level Committee has agreed upon a roadmap towards reaching a final deal within 60 days, laying the foundation for the immediate commencement of further technical talks,” they continued.
Additionally, Abbas Araghchi, the foreign minister of Iran, stated on X that “mediation has delivered major progress to end the Lebanon War.”
Following a mostly bullish start to trade, stock markets were mixed.
Gains were reported in Tokyo, Seoul, and Taipei thanks to yet another impressive showing by technology stocks. Bangkok, Shanghai, and Mumbai all saw improvements in their markets.
But Jakarta, Manila, Wellington, Singapore, Hong Kong, and Sydney collapsed.
Frankfurt, Paris, and London opened higher in Europe.
“Markets are likely to open with a cautious tone to start the new week as it remains clear that the situation in the Middle East remains fragile, following the positive response last week to reports of a US-Iran ceasefire,” stated Skye Masters of National Australia Bank.
“At current levels, the risk is for a lift higher, but the dollar is likely to remain supported and the oil price could swing either way.”
Additionally, sterling continued to be under pressure following a sell-off in response to UK Labour lawmaker Andy Burnham’s victory in the by-election on Thursday.
The outcome raised hopes that Burnham might succeed Prime Minister Keir Starmer, who has been under increasing pressure from Labour lawmakers.
The troubled prime minister “is expected to announce on Monday that he will step down as prime minister after overwhelming pressure from Labour MPs to make way for Andy Burnham,” according to The Guardian.
According to reports, investors were worried that Burnham may implement additional expenditure plans that would exacerbate Britain’s existing heavy debt load.
Market Data
Hong Kong’s Hang Seng Index dropped 0.4% to 23,822.25, while Tokyo’s Nikkei 225 increased 1.6% to close at 72,353.96.
Seoul’s Kospi increased 0.7% to 9,114.55, while Shanghai’s Composite Index increased 1.8% to settle at 4,163.10.
The FTSE 100 in London increased by 0.1% to 10,368.72.
The pound sank to $1.3210 from $1.3218 on Friday, while the euro slipped to $1.1457 from $1.1464.
The euro fell to 86.72 pence from 86.73 pence, while the dollar increased to 161.72 JPY from 161.27 yen.
