Oil slides after Trump agrees to conditional two-week Iran ceasefire
Oil slides after Trump agrees to conditional two-week Iran ceasefire
Global oil prices dropped significantly following President Donald Trump’s agreement to a two-week pause in hostilities with Iran, provided that vessels continue to pass through the vital Strait of Hormuz. The decline affected both Brent crude and US crude, with the former falling to $92.30 a barrel and the latter to $93.80. However, these levels remain above pre-conflict benchmarks, which were set before the dispute began on 28 February.
The energy market saw increased volatility due to Iran’s threats to disrupt Middle Eastern oil and gas exports by targeting ships in the Strait of Hormuz. This disruption was a response to US and Israeli airstrikes, which had triggered the conflict. Trump’s decision to impose a conditional ceasefire aimed to ease tensions and avoid further escalation.
“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 announced the deal in a social media post on Tuesday evening, setting a deadline for 20:00 EDT on Tuesday (00:00 GMT on Wednesday). Should no agreement materialize, he warned that “a whole civilisation will die tonight.”
Xavier Smith of AlphaSense observed that Trump’s threats might reflect a calculated effort to prevent energy prices from rising sharply. Escalating the conflict could have caused a “self-inflicted economic wound,” which few leaders would willingly endure, especially with political support being a key concern.
