The news about a ceasefire between the United States and Iran has sparked a global rise in equities and dramatic falls in the price of oil, both internationally and domestically. The price of West Texas Intermediate, the U.S. benchmark, fell by about 15% from about $112 a barrel to prices in the low $90s. Worst-case scenarios for energy prices and their effects on both the U.S. and global economies have been avoided. Moreover, social media posts by President Donald Trump suggest that over the next 14 days, the temporary ceasefire will be replaced by some sort of extended truce between the regime in Iran and the U.S.

Still, the initial sigh of relief should not be confused with a return to normal.

Fundamental disagreements between the U.S. and Iran continue to exist. The risk of new fighting remains high. The influence of extremists within the regime has not broken. It is important to remember that since 1973, political instability in the Middle East has caused five oil price shocks. This means that the global oil market is entering a new phase of persistent........

© Washington Examiner