Iranian media reported on the 15th that the country's Supreme National Security Council issued a statement in the early hours confirming the finalization of a memorandum of understanding on a ceasefire with the United States.

The Iranian National Security Council stated that the text of the understanding between Iran and the US has been finalized and is scheduled to be signed on Friday, June 19th. Former President Donald Trump noted that the Iran nuclear deal was reached despite opposition from Israeli Prime Minister Benjamin Netanyahu.

He also stated that the Strait of Hormuz will reopen upon the signing of the agreement on Friday. Restoring energy shipments through this critical waterway is expected to alleviate pressure from rising oil prices, which have fueled inflation and dampened global growth prospects.

International oil prices fell sharply. At the time of reporting, Brent crude futures were down nearly 4% to $83.90 per barrel, while WTI crude futures dropped over 4% to $81.19 per barrel. European natural gas futures also saw a significant decline, falling as much as 5.8% at one point.

An analysis from Haitong International Securities suggested that the impasse over the Strait of Hormuz has been a core source of the recent "summer chill" affecting markets. With recent US-Iran negotiations on reopening the strait nearing consensus and an agreement likely, a "swift reopening of the Strait of Hormuz" could provide global equity markets with a short-term respite from adjustment pressures.

Consequently, risk appetite is expected to see a short-term recovery. The "summer chill," referring to the liquidity-driven shock affecting global stock markets, is also anticipated to subside temporarily in the near term. However, risks have not been fully eliminated, and vigilance is still required in July for potential impacts from crude oil inventory replenishment, persistent high inflation in major economies like the US and Europe, and financing pressures.

The sharp decline in international oil prices is expected to significantly ease cost pressures for airlines. The International Air Transport Association (IATA) previously forecasted that global airline fuel costs are projected to rise to $350 billion in 2026 from $252 billion in 2025.

Another report from Guotai Junan Securities noted that China's domestic aviation fuel ex-factory price fell 15% in June, aligning with their earlier expectations. The proportion of oil price coverage by the domestic fuel surcharge increased compared to May.

The peak summer travel season pre-sales have not yet commenced. It is anticipated that once the season kicks off after the conclusion of middle school entrance exams, a combination of supply-demand dynamics and falling oil prices will support airlines in passing through higher fuel costs more effectively. The current scenario of high oil prices during a seasonal trough presents a potential contrarian opportunity.

Hong Kong-listed stocks involved in the aviation sector include: China Eastern Airlines Corporation Limited (HKG: 00670), Air China Limited (HKG: 00753), China Southern Airlines Company Limited (HKG: 01055), and Cathay Pacific Airways Limited (HKG: 00293).