Oil prices volatile after broken ceasefire accusations

Summary

Marketplace Morning Report: Oil Prices Volatile After Broken Ceasefire Accusations

Release Date: June 24, 2025
Host: David Brancaccio
Source: Marketplace, BBC World Service

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1. Oil Market Volatility Amid Ceasefire Accusations

The episode opens with a significant development in the Middle East, where tensions between Israel and Iran have impacted global oil prices. Despite conflicting accusations regarding missile launches, the market reacted sharply to a reported ceasefire agreement.

• Price Fluctuations: Brent crude oil prices experienced a dramatic drop, falling 15% from $81 per barrel the previous day to $69 per barrel following Israel's announcement of a U.S.-brokered ceasefire with Iran.

• Conflict Resurgence: Israel publicly identified missiles allegedly launched from Iran within the last hour, a claim that Iran has denied, adding uncertainty to the ceasefire's stability.

Notable Insight:

"It feels like the markets have firmly put the Iran-Israel conflict in the rearview mirror. They think we've moved past it."
— Altaf Qassam (Managing Director and Head of Europe Investment Strategy at State Street Global Advisors) [02:00]

Altaf Qassam elaborates that the market has removed the risk premium associated with potential escalation, including threats like the closure of the Straits of Hormuz and a protracted war. This reassessment has led oil prices to dip below pre-conflict levels.

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2. World Economic Forum in Tianjin: Tariffs, Inflation, and AI

The episode shifts focus to the World Economic Forum’s annual meeting, dubbed "Summer Davos," held in Tianjin, China. Key discussions centered around global economic challenges and future technological advancements.

• Tariff Deadlines: A pressing concern is the looming deadline set by U.S. President Trump for tariff implementations within the next two weeks. While China has secured a tariff deal with the U.S., other major economies like Japan and South Korea are grappling with the implications, affecting their investment and growth strategies.

• Inflation Concerns: Inflation remains a significant worry for businesses, as sustained high prices can dampen consumer demand and hinder production forecasts.

Expert Commentary:

"As long as inflation stays high, that demand will stay down. And that means they don't know who's going to buy and how many people are going to buy the goods that they are producing."
— Suranjana Tiwari (BBC Reporter in Tianjin) [03:20]

• Artificial Intelligence (AI) Integration: Another focal point is the potential impact of AI on the global economy. Analysts predict that AI could contribute up to 10% to economic growth. While countries like China are at the forefront of AI application in businesses, the full economic benefits are yet to be realized, requiring further investment and development.

"This conversation is certainly happening about going forward, how artificial intelligence can really be applied and can help all these businesses expand and in turn, the economies grow as well."
— Suranjana Tiwari [04:00]

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3. Global Stock Market Responses

Following the ceasefire announcement between Israel and Iran, global stock markets responded positively, reflecting investor optimism.

• Asian Markets: Japan's Nikkei closed up 1%, while Hong Kong's Hang Seng climbed 2%.
• European Markets: The Stoxx 600 index traded up by over 1%.

This uptick suggests that markets favor the reduced geopolitical tensions and the stabilization of oil prices.

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4. Oman to Implement Personal Income Tax

In a groundbreaking move, Oman has announced the introduction of a personal income tax, marking a significant shift in the Gulf region's economic landscape.

• Tax Details: Effective from 2028, Oman will impose a 5% tax on incomes exceeding $109,000. This change aims to diversify government revenue sources beyond oil.

• Impact: It is anticipated that only 1% of Oman’s 5 million population will be affected by this levy, preserving its reputation as a favorable destination for foreign workers accustomed to tax-free incomes.

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5. UK Regulator Targets Google's Search Dominance

The UK’s Competition and Markets Authority (CMA) is scrutinizing Google's dominance in the internet search market to foster greater competition and protect consumer interests.

• Regulatory Actions: The CMA's chief, Sarah Cardell, has indicated that Google may need to alter its search operations in the UK to comply with new British competition laws.

Key Points from Sarah Cardell:

"We've seen that Google accounts for more than 90% of all general search inquiries in the UK, and that's a position that it's held for many, many years."
— Sarah Cardell, CMA Chief [06:30]

"We're looking at outcomes like more choice and control for consumers, lower costs for businesses and importantly greater opportunities for innovation that really benefits the UK tech sector and the broader economy."
— Sarah Cardell [06:45]

• Economic Implications: British businesses collectively spent over £10 billion on Google Ads last year. The CMA aims to ensure that increased competition could lead to lower advertising costs and stimulate innovation within the UK tech industry.

• Google’s Stance: While not directly quoted in the transcript, it is noted that Google has expressed concerns that stringent regulations could hinder its ability to innovate rapidly in the UK market.

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Conclusion

The Marketplace Morning Report delves into significant global economic and political developments impacting oil prices, international trade policies, technological advancements, and regulatory actions in the tech industry. The episode underscores the intricate interplay between geopolitical stability, market perceptions, and regulatory frameworks in shaping the global economic landscape.

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Notable Quotes:

• "It feels like the markets have firmly put the Iran-Israel conflict in the rearview mirror. They think we've moved past it." — Altaf Qassam [02:00]

• "As long as inflation stays high, that demand will stay down. And that means they don't know who's going to buy and how many people are going to buy the goods that they are producing." — Suranjana Tiwari [03:20]

• "We've seen that Google accounts for more than 90% of all general search inquiries in the UK, and that's a position that it's held for many, many years." — Sarah Cardell [06:30]

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For a deeper dive into these topics, tune into the full episode of the Marketplace Morning Report on the BBC World Service.

Transcript

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[Luke Wilson]

Despite Israel and Iran both accusing each other of violating a ceasefire Live from the BBC World Service, this is the Marketplace Morning Report. I'm Luke Wilson in for Liana Byrne. Good morning. The price of Brent crude oil has fallen to $69 a barrel despite a statement from Israel saying that it has identified missiles launched from Iran in the last hour, something Iran has denied. Israel had announced it had agreed to a U S brokered ceasefire with Iran earlier this morning, causing the oil price to drop 15% from a high of $81 a barrel yesterday when traders were waiting for a response to the US Bombing of Iran's nuclear facilities. Altaf Qassam is managing director and head of Europe Investment Strategy and Research at State Street Global Advisors.

[Altaf Qassam]

It feels like the markets have firmly put the Iran Israel conflict in the rearview mirror. They think we've moved past it. They think that there's only going to be like diplomacy from now on and enter the conflict. And so that risk premium that was put into the price of oil, taking into account an escalation from Iran, possible shut of the Straits of Hormuz, you know, and a protracted war that has now all been removed from the oil price. So in fact it's lower than even before Israel started its attack on Iran.

[Luke Wilson]

Altaf Qassam from State Street Global Advisors the uncertainty over this conflict and what it means for oil prices and inflation is dominating the World Economic Forum meeting in the Chinese port city of Tianjin. It's known as Summer Davos after the group's biggest annual gathering every January in the Alps. But of course, it's not the only challenge facing the global economy, sluggish growth and a deadline from President Trump on tariffs in the next fortnight. The BBC's Suranjana Tiwari is in Tianjin and joins me now. Hi, Suranj. Does it feel like that tariff deadline is looming at this meeting?

[Suranjana Tiwari]

Absolutely. And that is for all the countries except for China, because the US Inked that deal with China, of course, and their tariff pause actually ends in August. But as for the other players, especially in the region, the Japans and South Korea's that have, you know, burgeoning economies but are very restricted by this tariff issue, they are having discussions, they're trying to navigate what's going on and how they can continue investing and continue planning for the next few years with everything that's going on in the world. And just to say as well that inflation is still a big concern for many of the businesses and business leaders that are attending here. As long as inflation stays high, that demand will stay down. And that means they don't know who's going to buy and how many people are going to buy the goods that they are producing.

[Luke Wilson]

And a lot of challenges in the present, but sort of looking ahead to the future, business leaders, delegates at this meeting, they talking about that and, you know, the issues with things like AI and how it will affect the economy.

[Suranjana Tiwari]

Absolutely. That is a key theme of this meeting, AI and how it can be applied in businesses around the world. In fact, there are some analysts that are saying that I could add up to 10% to growth in the global economy. So they're really trying to sort of find out the ways where it can be applied. I mean, I've been speaking to a lot of people and while there are a lot of test cases and there's lots of companies offering fantastic things, especially here in China, which obviously is very far ahead when it comes to things like AI and applying it in their businesses. We're still not at that crucial point where we're seeing the, the results of it. That might take some time, it might take more investment and more development. But this conversation is certainly happening about going forward, how artificial intelligence can really be applied and can help all these businesses expand and in turn, the economies grow as well.

[Luke Wilson]

The BBC's Suranjana Tiwari, thanks for joining us on Marketplace.

[Suranjana Tiwari]

Thank you.

[Luke Wilson]

Let's do the numbers and stock markets have risen around the world off the back of the Israel, Iran ceasefire announcement. In Asia, Japan's Nikkei closed up 1%. The Hang Seng climbed 2%. And in Europe, the Stoxx 600 is currently trading up more than 1%. Oman says it will impose a personal income tax, becoming the first Gulf country to do so. The move will break with long standing precedent in the region, which has often lured foreign workers with tax free incomes. The tax will come into force in 2028 and we'll see a 5% tax on incomes over $109,000. Only 1% of the country's 5 million people are expected to pay the levy. The UK's antitrust regulator, the Competition and Markets Authority, has suggested that Google might have to make changes to how it runs its Internet searches in the UK to ensure greater competition. Google's under pressure from regulators in Europe and the us. Now, the UK watchdog says the tech giant should be covered by new British laws designed to promote more competition in Internet searches. The regulator also says British businesses spend an average of $45,000 each per year on Google Ads. The CMA's chief is Sarah Cardell.

[Sarah Cardell]

We've seen that Google accounts for more than 90% of all general search inquiries in the UK, and that's a position that it's held for many, many years. And that means it's a key gateway for millions of us to access the Internet. But also critically, it's a critical channel for businesses to reach their consumers. And in fact, here in the UK, UK businesses spent collectively more than £10 billion just last year on search advertising on Google. So it's absolutely essential that effective competition is delivering good outcomes market for UK businesses and UK consumers. And we're looking at outcomes like more choice and control for consumers, lower costs for businesses and importantly greater opportunities for innovation that really benefits the UK tech sector and the broader economy. So that's what the new UK digital markets competition regime is designed to achieve. And today as a first step, we're proposing to designate Google with, as you say, so called strategic market status. It reflects its important decision in relation to this, to this critical digital activity. And we've also set out a roadmap of potential actions that we may take to deliver those improved outcomes for UK consumers.

[Luke Wilson]

Sarah Cardell there from the Competition and Markets Authority. Google says the UK has historically benefited from early access to its innovations, but punitive regulations could change that. That's all from us this morning. I'm Luke Wilson with the Marketplace morning report from the BBC World Service.

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