After days of being on an upward swing amid the Israel-Iran conflict, oil prices dropped dramatically by five percent on Tuesday, 24 June, within hours of US President Donald Trump's "announcement" of brokering yet another "ceasefire"—this time between Iran and Israel—before either nation made any official statement.
Oil prices had skyrocketed after 13 June, when Israel first launched strikes on Iran under Operation Rising Lion. This led to Iran responding with airstrikes and threats to close the Strait of Hormuz, a key global shipping route for the movement of oil and gas.
With the US entering the fight with direct air strikes on three Iranian nuclear sites on 22 June, Iran's Parliament voted to authorise the potential closure of the Strait, which it controls from the northern side, sparking global concerns. Iran also targeted the largest US military base in the Middle East in Qatar.
With the conflict now seemingly moving toward de-escalation, the Strait seems to be out of the woods, for now, as stabilising oil prices may indicate. Yet, the importance of the Strait as a critical geo-strategic, non-military lever for oil-rich Iran was not lost on anyone.
Choking of the Strait could deal a severe blow to the global economy already reeling under uncertain and unilateral trade and tariff measures.