Oil slides after Trump agrees to conditional two-week Iran ceasefire

Oil Slides After Trump Agrees to Conditional Two-Week Iran Ceasefire

Following President Donald Trump’s announcement of a two-week ceasefire with Iran, global oil prices experienced a notable drop. This agreement hinged on Iran’s commitment to allow uninterrupted passage through the crucial Strait of Hormuz. The decline affected both major benchmarks, with Brent crude falling approximately 15.9% to $92.30 (£68.87) per barrel and US-traded oil dropping nearly 16.5% to $93.80.

Although the prices are lower than their peak, they remain above pre-conflict levels, which began on February 28. The surge in energy costs was driven by the disruption of Middle Eastern oil and gas supplies due to Iran’s threats against ships navigating the strait, retaliating against US and Israeli airstrikes.

“I will halt the bombing and attacking of Iran for two weeks, provided the Islamic Republic of Iran agrees to fully, immediately, and safely open the Strait of Hormuz,” Trump stated in a social media post.

Trump had set a deadline for 20:00 EDT on Tuesday (00:00 GMT on Wednesday), warning that “an entire civilization will perish tonight” if no resolution was achieved. Xavier Smith from AlphaSense highlighted that Trump’s threats might have been tempered by concerns about escalating the conflict and allowing energy prices to soar. Such a scenario could lead to a “self-inflicted economic wound” that few would deliberately cause, especially with the weight of approval ratings on his political standing.