The threat to what is now a fragile ceasefire in the Middle East and the insistence by Iran that the Strait of Hormuz will remain closed to marine traffic has prompted a frantic round of political negotiations across the region and beyond.

Israel’s attacks on Lebanon have continued and so Iran announced the Strait would remain closed to traffic until those attacks stop.

The USA and Israel said the ceasefire did not include Lebanon but has been disputed by Iran and Pakistan which acted as an intermediary for the peace negotiations.

It has prompted fears that the ceasefire will not last the agreed two weeks and the heads of the International Monetary Fund (IMF), the World Bank Group (WBG) and the World Food Programme (WFP) issued a hard-hitting statement following a meeting to discuss the global economic and food security impacts of the war.

In a joint statement they said the impacts on the world’s food security and wider economy is severe.

“The Middle East war is upending lives and livelihoods in the region and beyond,” the statement explained. “It has already triggered one of the largest disruptions to global energy markets in modern history. Sharp increases in oil, gas, and fertilizer prices, together with transport bottlenecks, will inevitably lead to rising food prices and food insecurity.

“The burden will fall most heavily on the world’s most vulnerable populations, particularly in low‑income, import‑dependent economies. Spikes in fuel prices and potential sharp increases in food prices are especially concerning where fiscal space is constrained and debt burdens are already high, reducing governments’ ability to protect vulnerable households.

“Our institutions will continue to monitor developments closely and coordinate the use of all available tools to support those impacted by the crisis.

“In accordance with our respective mandates, and building on existing response mechanisms, we will provide support to safeguard lives and livelihoods, and to lay the foundations for a resilient recovery that delivers stability, growth and jobs.”

GCC states have expressed increasing concerns that Iran may well look to gain indefinite control of the Strait and with it the ability to close the route at will, effectively holding GCC economies tor ransom.

The six Gulf Cooperation Council (GCC) countries have welcomed the ceasefire but stressed that the Strait of Hormuz must reopen and any deal must result in a permanent, long-term arrangement.

UK prime minister Sir Keir Starmer has been in the Gulf this week in an effort to look at ways in which the strait can be reopened.

He met Mohammed bin Salman, crown prince of Saudi Arabia, in Jeddah and once again stressed the Strait could not and should not be closed to traffic.

Starmer welcomed the ceasefire and set out how efforts must now be focused on upholding it and turning it into a lasting peace.

He was clear that it was vital now to continue work to reopen the Strait of Hormuz and discussed the UK’s ongoing efforts to convene partners to agree and plan the practical steps required to give shipping the confidence to transit the Strait.

Starmer’s discussions in the Gulf were expected to cover issues such as dealing with Iranian mines and ensuring the tankers that use the strait as a key transport route can be insured.

“There are a lot of practicalities about how this might work, and given the situation, there are a lot of moving parts,” one UK official said. “This isn’t the sort of thing that happens at the flick of a switch.”

It came after a group of 17 political leaders issued a joint statement  urging the three sides to keep the ceasefire.

The statement said:  “We welcome the two-week ceasefire concluded between the United States and Iran. We thank Pakistan and all partners involved for facilitating this important agreement.

“The goal must now be to negotiate a swift and lasting end to the war within the coming days. This can only be achieved through diplomatic means.

“We strongly encourage quick progress towards a substantive negotiated settlement.

“This will be crucial to protect the civilian population of Iran and ensure security in the region. It can avert a severe global energy crisis.

“We support these diplomatic efforts. To this end, we are in close contact with the United States and other partners. We call upon all sides to implement the ceasefire, including in Lebanon.

“Our governments will contribute to ensuring freedom of navigation in the Strait of Hormuz.”

Aarin Chiekrie, equity analyst, Hargreaves Lansdown added: “The FTSE 100 has continued yesterday’s momentum, opening marginally higher this morning despite little in the way of major stock results. This is the relative calm before the storm, as first-quarter earnings season is set to kick off next week with the likes of Barratt Redrow, Imperial Brands and Tesco first out of the gates. Overseas, tech names like ASML, TSMC and Netflix are also on the docket, with the first two likely being buoyed by strong chip demand amid the AI boom.

US stock futures slipped lower this morning, giving up some of yesterday’s gains as renewed Israeli strikes on Lebanon raised questions about the durability of a fragile ceasefire agreement in the Middle East. While it’s been a tough start to the year for equity investors, the bigger picture needs to be kept in mind. The S&P 500 has already rallied more than 7% from its 30 March low and is now down less than 1% year-to-date. While progress towards a more permanent resolution in the Middle East will dominate short-term market moves, it’s earning power that drives stock prices in the long term. Some corners of the market have seen their share prices get caught up in the broader market sell-off, despite a resilient or improving earnings picture, so there’s something to be said for being greedy when others are fearful.