Nicosia, Cyprus. The US-Iran agreement is an important development for energy markets and global trade, but inflationary pressure is expected to remain for some time, according to University of Cyprus economics professor Marios Zachariades. He said the agreement has already led to a sharp fall in international Brent crude prices, which should gradually be reflected at petrol stations in Cyprus in the coming weeks.
Fuel prices expected to ease
Speaking to the Cyprus News Agency, Zachariades said there has already been a major drop in the international price of Brent oil. He said this should be passed on gradually to gas stations in Cyprus over the coming weeks.
He said a more immediate reduction in gasoline prices at gas stations is expected in the coming weeks, based on developments in international markets.
Broader inflation impact to take longer
Zachariades said the effect on food production, transport costs and wider consumer prices would take longer to become visible. He said higher energy prices had already fed into production and supply chains.
Uncertainty remains despite agreement
Asked about the broader economic impact of the US-Iran agreement, Zachariades described it as a significant step but said it does not fully remove uncertainty.
He said the agreement amounts to a temporary two-month ceasefire accompanied by negotiations, and that markets and policymakers will continue to monitor developments closely.
Hormuz reopening seen as important
Zachariades said the reopening of the Straits of Hormuz is important. However, he said the process would not happen immediately and would require time, including efforts to locate mines.
He added that oil prices had remained high for a prolonged period but have now fallen below 80 dollars per barrel of Brent.