A two-week ceasefire between the United States and Iran is unlikely to significantly ease fuel prices in the near term without a complete end to the conflict, Hong Kong economists have warned, citing uncertainties in the volatile situation.
Economist Simon Lee Siu-po of the Chinese University of Hong Kong’s Shenzhen Finance Institute said that uncertainties remained, adding that fuel prices were still subject to volatility unless a permanent ceasefire was achieved.
“There are lots of variables – whether the [Strait of Hormuz] will permanently open, [if it will be] free of charge or with a charge, its level,” he said. “Unless both sides permanently cease fire … there is a risk factor in the price.”
He added: “Unless there is a permanent alternative way to transport oil from the Middle East to Asia, otherwise, it is still subject to fluctuation as all oil is imported [in Hong Kong].”
Terence Chong Tai-leung, an economics professor at the university, also cautioned that prices would not plunge over the two-week ceasefire.
“It’s not yet a complete ceasefire, and there are still fluctuations. It will take several months for prices to gradually decline after the war ends completely,” he said.
