Global oil prices are showing a significant decline following the announcement of a temporary ceasefire between the USA, Israel, and Iran, as well as the reopening of commercial shipping through the Strait of Hormuz. This creates additional economic pressure on the Russian Federation, which heavily relies on oil revenues to finance the war.
This is reported by Finway
The Global Oil Market Responds to Diplomatic Agreements
Ukrainian President Volodymyr Zelensky emphasized in his evening address that even the announcement of a ceasefire has been a positive signal for the markets, leading to a drop in oil prices. He highlighted that this is an important addition to the existing sanctions that are already impacting the Russian economy.
“Even the announcement of a ceasefire has allowed the markets to respond positively – the price of oil has decreased. This is simultaneously the right signal regarding Russia – that besides our long-range sanctions, other tools will also be effective,” he noted.
Risks for Russian Revenues and the Role of the Strait of Hormuz
Zelensky also pointed out that there are currently no grounds for reducing the sanction pressure on Russia, especially considering the current situation in the oil market. According to him, if the Strait of Hormuz is successfully reopened, it will become a global necessity that will further reduce Russia’s oil revenues. These funds, the president emphasized, allow Russia to continue its aggression and feel more confident, which is why Moscow actively supports the Iranian regime and seeks to prolong the conflict in the Middle East.
The diplomatic agreements entail a two-week mutual cessation of hostilities between the USA, Israel, and Iran, as well as the reopening of the Strait of Hormuz, through which a significant portion of global oil exports passes. Following this decision, the price of oil fell below $100 per barrel. US President Donald Trump stressed that the reopening of the Strait of Hormuz should happen immediately and ensure the safety of shipping.
Ukrainian military experts have also joined the consultations regarding the organization of operations in the Strait of Hormuz, highlighting the importance of international cooperation in stabilizing the energy market and maintaining the safety of maritime transport.