Oil prices have dropped following the United States and Iran’s signing of an interim peace agreement, resuming a slide interrupted by US President Donald Trump’s warning that he could restart his military campaign.

Brent crude fell 2.3% on Thursday in Asia, returning the international benchmark to near to where it was 24 hours previously.

Brent futures for delivery in August stood at $ 77.73 as of 05:30 GMT, only about 7% higher than before the US and Israel launched their war on Iran on February 28.

After several days of declines, Brent briefly spiked above $ 81 a barrel on Wednesday after Trump warned that the US could “go right back to dropping bombs” on Iran if it doesn’t “behave”.

Shrugging off losses on Wall Street overnight, Asian stock markets rallied on renewed optimism for an end to nearly four months of disruption to global energy supply chains.

Japan’s benchmark Nikkei 225 and South Korea’s Kospi both hit all-time highs, gaining more than 2% and 1.7%, respectively.

Taiwan’s Taiex rose as much as 1.3%.

Hong Kong’s Hang Seng Index bucked the trend, dropping 1.7%.

US stock futures, which are traded outside of regular market hours and often foreshadow the next day’s performance, climbed, with those tied to the benchmark S&P 500 and the tech-heavy Nasdaq Composite climbing about 0.8% and 1.3%, respectively.

“Putting aside the contents of the MoU, markets are likely to be welcoming the fact that both the US and Iran signed it sooner than initially expected,” Oxford Economics Lead Economist for Japan, Norihiro Yamaguchi told Al Jazeera.

Al Jazeera