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A plunge in the oil price, stock market rally and renewed hopes for the global economic outlook. After the announcement of a two-week ceasefire in the Iran<\/a> war, the relief in financial markets was palpable. But it is far from absolute.<\/p>\n For the past six weeks, the economic damage had been steadily mounting, as the effective closure of the strait of Hormuz by Tehran triggered the worst energy crisis of the modern era<\/a>.<\/p>\n Steps towards peace should limit further costs. Any progress towards reinstating shipments through the critical waterway<\/a> for a fifth of global oil and gas supplies \u2013 in a world where fossil fuels still drive economic activity \u2013 will ease fears over an apocalyptic supply crunch.<\/p>\n However, the situation remains highly volatile as Tehran and Washington issue conflicting messages about whether the Hormuz channel is open or not, and as Israel continues to strike Lebanon<\/a>. With uncertainty over a durable peace in the Middle East, economic risks still remain.<\/p>\n Enough damage has already been done to guarantee lasting consequences. Consumers are already feeling the pinch from prices for energy products that remain higher than before the war. Bombed-out oil and gas facilities, snarled-up shipping and halted production lines cannot be restored overnight.<\/p>\n Even after the more than 10% fall in the oil price<\/a> on Wednesday, Brent crude remains above $90 a barrel \u2013 significantly higher than before the start of the war, when the global oil benchmark traded below $73 a barrel.<\/p>\n Relative to a lengthy conflict keeping the price above $100 a barrel, that still stands as progress. A worst-case scenario of persistently high oil prices could risk triggering recessions in multiple countries worldwide.<\/p>\n However, despite the tentative steps towards peace, most economists forecast the oil price will remain above its prewar level throughout 2026.<\/p>\n