NZ welcomes Iran ceasefire as government weighs ongoing economic damage

New Zealand has welcomed a two-week ceasefire between the United States and Iran, with the government cautioning that significant economic damage will continue even as the immediate crisis eases.

The ceasefire was announced with less than two hours remaining on a US ultimatum deadline, after Iran’s Supreme National Security Council confirmed it accepted the agreement. Formal negotiations between Washington and Tehran are scheduled to begin in Islamabad on Friday, with Pakistan, Turkey and Egypt credited with mediating the breakthrough.

At the Strait of Hormuz, which had been reduced from approximately 125 ship transits per day to just four during the conflict, traffic is expected to gradually resume. Global oil markets responded immediately, with West Texas crude falling 16% and Brent crude dropping more than 12% to around USD $95 per barrel.

Foreign Minister Winston Peters, who had been in Washington meeting US Secretary of State Marco Rubio, welcomed the development while urging continued effort. “We welcome all efforts to bring an end to this conflict,” Peters said in a government statement. “While this is encouraging news, there remains significant important work to be done in the coming days to secure a lasting ceasefire. In the coming days and weeks, New Zealand will stand in support of all efforts to bring about a lasting, durable end to this conflict.”

Prime Minister Christopher Luxon described the announcement as “a really promising and really encouraging move” and “the most encouraging news I think we’ve had,” but warned the country was not out of the woods. “There’s no escaping the fact there will be a hit to inflation and economic growth,” he said, noting that restoring full traffic through the Strait from its near-shutdown level would take considerable time.

Finance Minister Nicola Willis, who earlier in the day had described the geopolitical situation as “alarming for the whole world,” acknowledged the economic modelling used in Wednesday’s Reserve Bank decision was already partially outdated given how quickly events had moved. She noted that oil and gas facilities across the region had been damaged or shut down and would take time to bring back online.

RNZ reported that New Zealand’s fuel stockpiles remain within normal ranges, with government data showing the country holds 62.6 days of petrol, 51.7 days of diesel, and 53.5 days of jet fuel either in the country or aboard inbound vessels. New Zealand remains on Phase 1 of its fuel response plan.

Labour leader Chris Hipkins had earlier called on the government to do “everything that it can to prepare for the potential shortage of fuel.” Labour deputy leader Carmel Sepuloni had described the rhetoric during the height of the crisis as “outrageous.”

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