economy
Relief in financial markets after Iran ceasefire – but it is far from absolute
Situation still volatile as Tehran and Washington issue conflicting messages about opening of Hormuz channel
TL;DR
- A two-week ceasefire in the Iran war has led to a rally in financial markets and a fall in oil prices.
- The closure of the Strait of Hormuz by Tehran had triggered the worst energy crisis of the modern era.
- Despite the ceasefire, the situation remains volatile, with conflicting messages about the channel's opening and ongoing conflict in the Middle East.
- Economic damage has already been done, with higher energy prices and disruptions to production and supply chains.
- Oil prices remain significantly higher than before the war, and economists forecast they will stay above pre-war levels throughout 2026.
- Uncertainty from Iran and Donald Trump adds to economic risks.
- Wars since 1946 have been shown to leave lasting economic scars that can take over a decade to recover from.