Key Highlights
- Brent crude plummeted 13% to approximately $94 per barrel; WTI declined 15% to roughly $96 per barrel
- A two-week ceasefire between the United States and Iran was announced Tuesday night
- President Trump pledged U.S. assistance in facilitating maritime traffic through the Strait of Hormuz
- Iran’s top diplomat verified that Tehran will permit secure transit for vessels navigating the strait
- Approximately 20% of the world’s oil supply passes through the Strait of Hormuz
Crude oil markets experienced a dramatic selloff Wednesday following the announcement of a temporary ceasefire between Washington and Tehran, alleviating concerns about potential disruptions to worldwide petroleum supplies.
Brent crude tumbled approximately 13% to settle at $94.77 per barrel. West Texas Intermediate plunged roughly 15% to reach $96.23 per barrel. During early Wednesday trading sessions, both major oil benchmarks touched intraday lows beneath the $92 threshold.
The diplomatic breakthrough emerged Tuesday night, arriving moments before President Trump’s self-established 8:00 p.m. ET ultimatum. Throughout the preceding days, oil prices had climbed to their highest levels in months as investors braced for potential military escalation.
Trump had previously cautioned that non-compliance might trigger devastating consequences. He characterized the potential scenario as one in which “a whole civilization could die.”
Details of the Temporary Truce
President Trump revealed the military stand-down through a Truth Social announcement. He indicated that U.S. forces had accomplished their primary strategic objectives and acknowledged that Iranian officials had presented a comprehensive proposal that could serve as the foundation for broader negotiations.
Trump Halts Iran Strikes for Two Weeks Amid Ceasefire Push
U.S. President Donald Trump said on Truth Social that, following discussions with Pakistani Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, and conditional upon Iran’s agreement to the immediate, full, and… pic.twitter.com/npInV48tUR
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Iran’s Foreign Minister Seyed Abbas Araghchi validated that Tehran’s Supreme National Security Council had authorized a cessation of offensive operations. He emphasized that maritime vessels would receive “safe passage” through the Strait of Hormuz, contingent upon the suspension of hostile actions and proper coordination with Iranian maritime authorities.
Pakistan emerged as a crucial diplomatic intermediary, facilitating negotiations between both nations during the critical hours preceding the deadline.
President Trump characterized the agreement as a “double-sided pause.” He emphasized that its continuation depends on Iran guaranteeing the swift restoration of commercial traffic through the strategic waterway.
Strategic Waterway Resumes Operations
The Strait of Hormuz remained essentially impassable for several weeks throughout the confrontation. The narrow passage facilitates approximately 20% of worldwide petroleum transport, establishing it as one of the planet’s most vital maritime corridors.
President Trump announced via social media Wednesday that the United States would assist “with the traffic buildup” traversing the strait. His post stated: “There will be lots of positive action! Big money will be made. Iran can start the reconstruction process.”
The resumption of navigation through the strait represents the primary catalyst behind the market’s pronounced reaction. While the passage remained blocked, supply anxieties had propelled prices upward. The ceasefire eliminated that immediate threat, though questions about long-term stability remain.
The negotiated pause in hostilities extends for a fortnight. Iranian officials have confirmed their commitment to ensuring safe maritime passage throughout this period, assuming all parties honor the agreement’s conditions.
