NEW YORK (Web Desk) – Global oil prices fell sharply on Wednesday after reports suggested Iranian oil could soon return to international markets under a proposed agreement with the United States, easing inflation concerns and pushing bond yields lower.
Brent crude futures dropped below $80 per barrel, reaching their lowest level since the beginning of the US-Iran conflict in March. Market sentiment improved after a senior US official indicated that Washington may waive sanctions on Iranian oil as part of a deal aimed at ending the conflict.
The potential return of Iranian oil has raised expectations of millions of additional barrels entering global markets, helping ease concerns about supply shortages and reducing pressure on energy prices.
Bond markets reacted positively to the development, with US Treasury yields moving lower. In Asia, 10-year Japanese government bond yields fell to 2.63%, while Australian 10-year bond yields declined to 4.787%.
Although details of the proposed US-Iran agreement remain limited, the deal is expected to be signed on Friday. The prolonged disruption in the Strait of Hormuz over recent months has significantly reduced global oil inventories, with US reserves reportedly at their lowest level since 1983.
Meanwhile, Wall Street witnessed mixed trading overnight. The Nasdaq index fell 1.15% as investors reduced exposure to technology and semiconductor stocks. However, gains in financial and industrial sectors helped the Dow Jones Industrial Average reach a record high.
Asian stock markets were mostly subdued. Japan’s Nikkei index gained 0.4%, while markets in Hong Kong and Shanghai remained largely stable. Shares in Taiwan and South Korea edged lower, contributing to a decline in the broader Asia-Pacific index.
Investors are also closely watching the first Federal Reserve policy meeting chaired by Kevin Warsh. While markets widely expect interest rates to remain unchanged, attention is focused on Warsh’s comments regarding inflation and future monetary policy.
Analysts believe the Fed chair may adopt a cautious approach, emphasizing patience on interest rates and inflation. However, any indication that the central bank is considering future rate hikes could be viewed as a hawkish signal by financial markets.
