Monday brought euphoria to international financial markets after the announcement of an agreement between the Trump administration and the Republic of Iran to end the war in the Middle East. The Spanish stock market opened as one of the main players of the day. The Ibex 35 smashed through all resistance levels, brushing a new all-time high as it broke through the 19,000-point mark, reaching 19,122 points. With this latest surge, the blue-chip index has now accumulated a rise of around 10% since the start of the year.
The agreement between the United States and Iran brings an end to the military escalation that had kept the Middle East on edge and was threatening global macroeconomic stability.
The Strait of Hormuz reopens to global trade
The economic linchpin of the bilateral deal is the immediate reopening of the Strait of Hormuz. This maritime channel is one of the world’s key logistical choke points, through which a fifth of the oil consumed worldwide passes, along with vast volumes of consumer and industrial goods.
Since the outbreak of the conflict, the blockage of this shipping lane had choked global supply chains and sent the price of crude oil soaring to unsustainable levels, fuelling fears of a new inflationary crisis.
