Stock Market Impact: Brent July futures fell over 5% to $98.12 per barrel, its lowest in nearly three weeks; WTI slipped 5.2% to $91.31 per barrel. The decline was driven by growing expectations of a U.S.–Iran peace deal that could reopen the Strait of Hormuz, yet constrained flow levels kept a price floor.
Listed Companies and Sectors: Lower crude prices benefit oil‑importing firms and non‑energy sectors, while oil‑producing and energy‑service companies face margin pressure.
Investment Flows: Optimism around a potential peace agreement may boost foreign investment interest in regional energy projects, though the continued naval blockade risk tempers sentiment.
Geopolitical Context: President Donald Trump announced that a memorandum of understanding on a peace deal with Iran was “largely negotiated,” aiming to reopen the Strait of Hormuz. Pakistani mediators reported progress, but Iranian state media denied that a near‑final deal existed. Trump later said there was no rush to finalize the deal and that a naval blockade would remain until an agreement is reached. Washington and Tehran remain at odds over Iran’s nuclear programme, with Tehran rejecting U.S. demands to hand over enriched uranium holdings.
Oil Supply Dynamics: Despite diplomatic hopes, oil flows through the Strait of Hormuz stayed at a fraction of pre‑war levels, providing a floor for global oil prices.
