Reference News Network June 25 report, according to AFP June 24 report, after Israel agreed to the bilateral ceasefire proposed by US President Trump, despite not yet receiving direct confirmation from Iran, Asian crude oil trading prices fell sharply by 5%, investors were relieved, and this also boosted the stock market.

At 6:35 GMT, North Sea Brent crude fell 5.02% to $67.89 per barrel, and US West Texas Intermediate (WTI) crude also dropped sharply by 5.21% to $64.94 per barrel. After Israel agreed to achieve a "bilateral ceasefire" with Iran, crude oil prices accelerated their decline. Oil prices had already fallen more than 7% on Monday, and traders seemed to feel relieved after Iran's very limited attack on a US base in Qatar.

In the case of a significant drop in oil prices, investors' concerns about the economic situation were alleviated. The Tokyo Nikkei index closed up 1.08%, and the TOPIX index also rose 0.79%. South Korea's Seoul stock market surged 2.96%, Sydney index rose 0.95%, and Taipei stock market also jumped 2.10%. In addition, as of 6:30 GMT, the Hong Kong Hang Seng Index was up 1.14%.

Experts believe that although the situation is not yet clear, the ceasefire news "dispelled concerns about the Middle East situation", thus encouraging buying in the stock market. The drop in oil prices also "benefited" this market recovery.

According to AP June 23 report, if oil prices are used as a measure, Iran has just shown signs of backing down.

On the afternoon of the 23rd, oil prices experienced a historic plunge because traders bet that Iran's decision to bomb a US base in Qatar indicated that Iran did not intend to do something that could truly harm the United States: cutting off oil flow by attacking oil tankers.

Tom Klosza, chief market strategist at consulting firm Turner-Mason, said: "When Iran responded and this response was moderate, oil prices fell." He believed that Iran's limited response was far less than what many traders had previously worried about. "This is comparable to several historical massive sell-offs."

The oil price drop on the 23rd brought oil prices back to levels before the outbreak of the Israel-Iran conflict, which was slightly above $68 per barrel for US crude oil.

This is good news for US President Donald Trump. He hopes the Federal Reserve will stop worrying about inflation and start cutting interest rates. If the trend of falling oil prices continues, it will also be good news for drivers this summer.

The current issue is whether Tehran will continue to maintain oil flow.

Even before Iran launched its limited attack on Monday, some traders doubted whether Iran would try to close the Strait of Hormuz. They pointed out that a large portion of Iran's crude oil is transported through this waterway, amounting to 1.5 million barrels per day, and oil is an important source of revenue for Iran, which they are unwilling to damage.

At the current oil price, Tehran earns about $40 billion annually from oil transportation through the same waterway, equivalent to one-tenth of the country's total value of goods and services.

However, Andy Lipow, a petroleum analyst in Houston, pointed out that Iran does not need to completely close the strait to push up oil prices. Iran can interfere with navigation equipment to slow down transportation or lay mines in the water, forcing the US Navy to increase escort. He said Iran can also bomb oil tankers, causing insurance premiums paid by shipping companies to skyrocket.

According to AFP June 23 report, after Iran launched a limited attack on a US military base in Qatar, oil prices dropped significantly on the 23rd, pushing up Wall Street stock markets, while European stock markets that closed earlier remained calm.

The prices of two major benchmarks in the crude oil market - West Texas Intermediate (WTI) and Brent crude - both fell more than 7%, returning to levels before the first attack by Israel on Iran on June 13.

To investors' relief, Iran's retaliation was limited, did not hit any energy infrastructure, and did not threaten traffic through the Strait of Hormuz. As a key passage for the oil market, 20% of global oil transport passes through here.

Patrick O'Halloran of the "Briefing" website told AFP: "The market basically believes that Iran's response was relatively weak, which also makes the market think that tensions between the US and Iran may not escalate further."

He also said that the US stock market was mainly driven by signs of easing geopolitical tensions, as well as an optimistic response to the comments of Federal Reserve member Michelle Bowman.

Bowman said that if inflation pressures continue to be controlled, she might support cutting interest rates in July. She is the second Fed official to mention the possibility of a rate cut in July.

Charlotte Demombey, economist at ING, told AFP: "Investors are beginning to get used to uncertainty, which has become a new normal." (Translated by Wang Zhongju, Lu Longjun, Tu Qi)

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