Oil prices recorded a sharp decline, falling below the $94 level, as the decision for a temporary ceasefire between the US and Iran significantly shifted sentiment in energy markets.
US crude WTI futures fell more than 18% on Wednesday, dropping to $92.3 per barrel. Brent also declined by 16% to $91.5 per barrel.
Ceasefire pushes oil prices below $95, with Brent moving toward $90
US President Donald Trump described the agreement as a “two-way ceasefire,” contingent on Iran reopening the Strait of Hormuz — one of the world’s most important energy transit routes.
He also revealed that Washington has received a 10-point proposal from Tehran, which he described as a “working basis for negotiations.”
The two-week ceasefire is seen as a critical “window” for finalising and implementing a broader agreement that could end the escalation.
For its part, Iran has agreed to reopen the Strait for the same period, on the condition of a full halt to attacks, stating that transit will be coordinated with its armed forces.
The near-complete closure of the Strait of Hormuz in recent weeks — through which around 20% of global oil supply passes — had caused significant disruption in markets.
Concerns over supply disruptions had increased fears of rising inflation and a slowdown in the global economy.
The temporary de-escalation appears to be reversing, at least in the short term, this trend, with investors reassessing the risk of a prolonged energy crisis.
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