Iran and Israel agreed to cease strikes after a US appeal, oil prices fell, and inflation fears temporarily eased. Brent is around $92, WTI is around $88. This is an important signal: the market recognizes the US-Iran military risk, but isn't pricing in a full-blown supply shock. Otherwise, Brent would be closer to $105-120. It was actually funny that Trump announced a ceasefire was imminent, and journalists counted this 37 times. In reality, the helicopter only made the conflict worse.
Oil prices are the major indicator of geopolitical risks and situations. Investors easily observes that the oil prices regularly increases because if conflicts continue for longer time then its disrupt the global oil supplies. There for traders expect tension so they make decisions according to there observations and mainly global markets reacts according to investors predictions. But if geopolitical situations solves and ceasefire can be held then its not the guarantee of long term stability of global market. Sometimes political leaders trying to just maintain the global trade market by there negotiations. So the investors wisely focused on actual development rather than fake statements. So the learning point is that market behavior always shows the geopolitical situations and if conflicts continue then market goes in loss and the prices of energy sectors continuously increased.
