Following the United States and Iran’s agreement on a two-week truce, which raised prospects for the resumption of oil and gas exports through the Strait of Hormuz, oil futures fell below $100 per barrel on Wednesday as stock and bond prices surged dramatically. Less than two hours before his ultimatum for Iran to reopen the Strait, which is used to transport over one-fifth of the world’s oil and LNG, or risk catastrophic assaults on its civilian infrastructure, US President Donald Trump declared the truce, which was mediated by Pakistan.
Iran promised that if strikes against it stopped, it would stop its counterattacks and allow safe passage across the waterway. After the United States and Iran reached a precarious two-week ceasefire agreement that involves the safe and prompt reopening of the Strait of Hormuz, Gulf stock markets closed higher on Wednesday. With a 13% increase in blue-chip developer Emaar Properties and an 11% increase in leading lender Emirates NBD Bank, Dubai’s main market saw its largest intraday gain since March 2020, rising 6.9%. Budget carrier Air Arabia saw a 10.8% increase, among other gains. As the dispute persisted, Dubai’s main index fell more than 16% in March, making it the poorest performer among its peers in the region.
First Abu Dhabi Bank, the country’s biggest lender, increased by 5%, and real estate behemoth Aldar Properties surged by 10.1%, contributing to a 2.9% increase in Abu Dhabi’s benchmark index. Adnoc Gas, an energy company, increased 3.5%, and Abu Dhabi Ports Company increased 11.1%. According to Qaqish, he anticipated that the UAE government would continue to boost the economy by providing assistance to banks, small and medium-sized businesses, and new initiatives to boost confidence. As all of its components improved, the index in Qatar increased 3.7%, with Qatar National Bank, the largest lender in the Gulf, rising 4.2%.
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