Crude oil prices have dropped sharply after a ceasefire was announced between Israel and Iran, easing weeks of geopolitical tensions in the Middle East. Brent crude is down by 6.1% to $67.14 per barrel, while WTI crude fell 6% to $64.37 per barrel.
This marks a return to pre-conflict levels, offering global relief. However, the impact on Nepal’s economy remains minimal—and here’s why.
Nepal’s Oil Market Depends Entirely on India
Nepal does not import crude oil or refined petroleum directly from international markets. Instead, it buys refined fuel from India through a government-to-government agreement. This means international oil market fluctuations—whether hikes or drops—don’t have a direct or immediate effect on domestic prices.
So, even though the global oil market has corrected due to the Middle East ceasefire, fuel prices in Nepal are unlikely to change unless India revises its rates.
Why Did Oil Prices Rise Earlier?
The surge in oil prices began on June 13, when Israel launched a surprise attack on Iran’s nuclear facilities. In response, both nations exchanged missile strikes for 12 consecutive days, raising fears of a prolonged conflict in the region, home to key oil producers.
The situation escalated further when the United States reportedly struck Iranian nuclear reactors, increasing market uncertainty and pushing crude prices upward due to anticipated supply disruptions.
Ceasefire Announced After Weeks of Tension
After nearly two weeks of military action, both Israel and Iran have officially declared a ceasefire. The announcement has reassured investors and energy traders, resulting in a dramatic market correction in oil prices.
What This Means for Investors?
The sharp decline in crude prices:
- Indicates a return to short-term market stability.
- Could lower transportation and production costs globally.
- Might impact energy stocks and oil-exporting economies in the days ahead.
This event highlights how geopolitical risks directly influence global markets, especially in sectors like oil and gas.
Actually the war and ceasefire is always on the hand of US and China, So the prices of OIL😢
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