Crude oil prices crashed after the US and Iran agreed to a two-week ceasefire deal. As a part of the deal, Iran agreed to temporarily reopen the Strait of Hormuz, allowing safe passage of ships.
Brent crude oil price slipped 15.19% to $92.67 a barrel, while the US West Texas Intermediate (WTI) crude futures plunged 15.02% to $96.03 a barrel.
Safe passage through the strait will be possible via coordination with Iran’s armed forces and with “due consideration of technical limitations,” Iranian Foreign Minister Abbas Araghchi said in a post on X.
US President Donald Trump announced he would hold off on his threat of attacks on Iran, while the ceasefire would be subject to Iran reopening the waterway, and will allow an agreement “to be finalized and consummated.”
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump said in a post on Truth Social. The decision to hold off on attacking Iran is “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.”
The Strait of Hormuz transits about a fifth of the world’s oil and liquefied natural gas. The near-closure of the Strait due to the US-Iran war has roiled energy markets, with WTI still up about 40% since the conflict started at the end of February.
The curtailment of shipments is expected to leave more than 9 million barrels a day of oil output from key Middle Eastern producers shut in during April, according to a Bloomberg repot citing US government estimates.
Pakistan, which brokered the ceasefire deal, says it extends to Israel and Hezbollah fighting in Lebanon.
(With inputs from Agencies)
