Brent crude futures dropped $16.32, or 14.9%, to $92.95 per barrel, while US West Texas Intermediate (WTI) fell $18.16, or 16.1%, to $94.79. The sharp decline followed Trump’s announcement just hours before his deadline for Iran to reopen the vital waterway, through which nearly 20% of the world’s oil supply passes.
Declaring it a “double-sided ceasefire” on social media, Trump signaled a dramatic shift from his earlier warning that severe consequences would follow if Iran failed to comply.
Iran responded by stating it would halt its attacks if strikes against it stopped, adding that safe transit through the Strait of Hormuz would be ensured for two weeks in coordination with its armed forces. Foreign Minister Abbas Araqchi confirmed the arrangement in an official statement.
Market analysts said the direction of oil prices will now depend on whether negotiations evolve into a lasting agreement and whether normal shipping flows through the strait can be sustained. However, they cautioned that volatility is likely to persist in the near term as talks continue.
Despite the temporary de-escalation, regional tensions remain high. Several Gulf states reported missile and drone activity or issued warnings urging civilians to seek shelter.
Experts also warned that even if a peace deal is reached, the Strait of Hormuz may remain a geopolitical flashpoint, with markets continuing to price in long-term risks.
The ongoing US-Israeli conflict with Iran had already triggered the steepest monthly rise in oil prices in history in March, exceeding 50%. Analysts say a significant geopolitical risk premium could remain embedded in oil markets depending on the outcome of ongoing negotiations.
Trump noted that the US has received a 10-point proposal from Iran, describing it as a workable basis for further talks and suggesting that both sides are moving closer to a long-term peace agreement. However, analysts caution that while the ceasefire is a positive step, many uncertainties still need to be resolved before a durable resolution is achieved.
