Brent crude prices retreated in the session as market participants digested reports of a ceasefire between the U.S. and Iran, easing immediate fears of a supply disruption in the Strait of Hormuz.
The diplomatic development has triggered a broad risk-on response, with equity markets across Asia rising on the back of lower energy costs and reduced geopolitical premium.
The drop in oil prices is providing significant disinflationary relief for major importers, particularly India.
Standard Chartered noted that the easing energy costs reduce pressure on external accounts, giving the Reserve Bank of India and other Asian central banks more headroom to prioritize economic growth over inflation containment.
This shift allows policymakers to consider a more accommodative stance as import bills stabilize.
The repricing reflects a rapid de-escalation of the risk premium that had built into energy markets amid tensions in the Middle East.