Oil prices plunge after ceasefire announcement
Oil prices fell sharply on Wednesday after the US president announced his agreement to a two-week ceasefire with Iran, on the condition that the Strait of Hormuz be reopened immediately, helping to ease concerns about the stability of global energy supplies.
According to trading data, Brent crude fell 13.6% to $94.43 a barrel, while US West Texas Intermediate crude dropped 14.3% to $96.82 a barrel, its lowest level in a long time.
This decline came after Trump announced the agreement, which preceded the deadline he had set for Tehran to reopen the Strait of Hormuz, through which about 20% of the world’s oil passes.
In this context, the US president described the truce as a ceasefire on both sides, after having previously threatened that an entire civilization would be destroyed if his demands were not met.
Analysts said the agreement represents a first step toward easing tensions in the region, but it does not eliminate future risks to the Strait of Hormuz.
According to experts, the oil market will continue to factor in the possibility of Iran repeatedly threatening the strait in the future, even with a peace agreement in place.
The US-Israeli war on Iran drove oil prices to their largest monthly increase in history, with gains exceeding 50% last March.
In the markets, West Texas Intermediate crude maintained its price advantage over Brent crude, due to the difference in delivery dates, as contracts closer to payment usually record higher prices, which reflects the usual market pattern.
This latest decline indicates how sensitive oil markets are to political developments, and reflects the state of anticipation that prevails among investors regarding any future agreements that may affect global energy supplies.
