Oil slides after Trump agrees to conditional two-week Iran ceasefire
Oil Slides After Trump Agrees to Conditional Two-Week Iran Ceasefire
Market Reactions Reflect Ceasefire Prospects
Global oil prices plummeted sharply following President Donald Trump’s announcement of a two-week ceasefire with Iran, contingent on the country allowing vessels to pass through the critical Strait of Hormuz. The US benchmark crude dropped nearly 16.5%, settling at $93.80 per barrel. However, prices remain above pre-conflict levels, which were established on February 28.
The recent energy market volatility stems from Iranian threats to block shipping lanes in retaliation for US and Israeli strikes. This disruption has raised concerns about supply chain stability, prompting a decline in oil costs. Trump’s conditional agreement aims to ease tensions, with the Islamic Republic of Iran required to fully open the strait for safe passage.
“I agree to suspend the bombing and attack of Iran for a period of two weeks… subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz,” Trump stated in a social media post.
Trump set a deadline for 20:00 EDT on Tuesday (00:00 GMT on Wednesday), warning that “a whole civilisation will die tonight” if no resolution was reached. Analyst Xavier Smith from AlphaSense highlighted that Trump’s decision to avoid escalating the conflict could prevent energy prices from surging further, shielding the economy from potential harm.
Smith argued that the president’s caution reflects a strategic move to avoid a self-inflicted economic blow, which would be risky given the pressure on his approval ratings. The conditional ceasefire balances immediate relief for markets with ongoing diplomatic stakes, as the situation remains fluid.
