The ceasefire in the Middle East has been extended indefinitely, but the Strait of Hormuz remains closed. European stock exchanges are greeting the news without enthusiasm: Paris is hovering around breakeven at -0.06%, while Frankfurt is gaining 0.20%. Brent crude is falling to $98.14 after a sharp rise the previous day. 🛢️
🔍 What's happening?
Donald Trump announced Wednesday morning the extension of the truce while maintaining the blockade of Iranian ports. The Strait of Hormuz, a strategic passage for a third of the world's oil, therefore remains closed.
On the markets, Paris is showing -0.06% at 08:00 GMT, weighed down by Bureau Veritas which is plummeting 11.68% and Eurofins Scientific which is losing nearly 9% following their quarterly results. Frankfurt, Milan and London are making modest gains between +0.10% and +0.20%. Oil is correcting: Brent is down 0.35% to $98.14, WTI is falling 0.60% to $89.13.
On the Asian side, Hong Kong closed down 1.22%, while Tokyo and Seoul finished in the green thanks to the technology sector, buoyed by AI demand which is holding up despite tensions.
💡 Why does this matter?
As long as the Strait of Hormuz remains closed, pressure is mounting on European energy reserves. Ipek Ozkardeskaya, senior analyst at Swissquote, points out that Europe could have only six weeks of oil and energy reserves ahead of it.
The problem: the market has already factored in the good news of the ceasefire into yesterday's prices. Kathleen Brooks, research director at XTB, sums up the situation well: the risk hasn't disappeared, it's just been postponed. The longer the strait remains closed, the higher nervousness will climb.
For traders, this means a dual reading: monitor oil which fluctuates based on geopolitical announcements, and stay alert to tech stocks which are benefiting from renewed interest driven by AI. The brokerage firm Aurel BCG notes that uncertainties surrounding US-Iran negotiations and the fragility of the ceasefire will continue to fuel volatility in crude oil.
📊 Our take
We're not getting carried away. Geopolitical risk remains fully intact.
Admittedly, the truce is holding for now and that's temporarily calming tensions. But the Strait of Hormuz being closed is a sword of Damocles hanging over oil prices and the European economy. Six weeks of reserves is very short. If negotiations drag on or fail, we could see another spike in energy volatility, with a domino effect on already fragile European indices. John Plassard from the private bank Cité Gestion is right: we're in a gray zone where investors don't know which way to turn. On the tech side, the exception proves the rule: demand for AI remains solid and offers support to Asian and European indices, but that won't be enough to offset a prolonged energy crisis.
For us, the verdict is clear: this ceasefire is only a tactical reprieve. For the French trader: stay vigilant on positions tied to oil and favor resilient tech stocks as long as the situation in the Middle East isn't definitively resolved.
✅ Key takeaways
- Truce extended but Strait of Hormuz still closed
- Oil declining after Tuesday's gains
- Paris stable, Frankfurt and London slightly positive
- European reserves estimated at only six weeks
- Tech sector driven by AI demand
What do you think? Are you staying exposed to oil or do you prefer to play it safe while waiting for the strait to reopen?
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