Oil slides below $100 after Trump announces two-week ceasefire
Donald Trump announced a two-week ceasefire with Iran on Wednesday, subject to the immediate and safe reopening of the Strait of Hormuz. He wrote on social media, "This will be a double-sided ceasefire!" after posting earlier on Tuesday that "a whole civilisation will die tonight" if his demands were not met.
Oil prices reacted to the announcement. Brent fell $14.84, or 13.6%, to $94.43 a barrel, and WTI slid $16.13, or 14.3%, to $96.82 a barrel as of 0023 GMT. Iran said it would halt its attacks if attacks against it stopped and that safe transit through the Strait of Hormuz would be possible for two weeks in coordination with Iranian armed forces, according to a statement by Foreign Minister Abbas Araqchi on Wednesday. Multiple Gulf states have identified missile launches and drone attacks or issued warnings to civilians to take shelter. The U.S.-Israeli war with Iran saw the steepest monthly oil price rise in history in March of more than 50%.
Donald Trump said the U.S. had received a 10-point proposal from Iran, which he called a workable basis to negotiate, and said the parties were very far along on reaching a definitive agreement for long-term peace. Tony Sycamore, an IG analyst, said, "It's a good start and could pave the way to a more permanent reopening - but lots of ifs still to work out." Saul Kavonic, an MST Marquee analyst, said, "Even with a peace deal, Iran may be emboldened to threaten the Strait of Hormuz more frequently in the future, and the market will price in heightened risk to the Strait of Hormuz going forward."
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Donald Trump has announced a ceasefire with Iran, subject to conditions. The announcement comes amid rising tensions and threats surrounding a vital global oil transit point - but what could this mean for the markets?
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