Oil prices tumbled sharply after Donald Trump and Iran agreed to a two-week ceasefire, pausing more than a month of conflict and allowing the reopening of the Strait of Hormuz.
Brent crude fell around 14% to $94 per barrel on Wednesday morning, while US crude dropped over 15% to approximately $95.60. Dubai crude saw even steeper losses, declining more than 18%.
The agreement followed a period of heightened tensions, with Trump previously threatening large-scale strikes on Iranian infrastructure. However, sentiment shifted after diplomatic intervention, including efforts by Shehbaz Sharif, helped broker a temporary pause in hostilities.
In a post on Truth Social, Trump described the development as “a big day for world peace,” confirming a “double-sided ceasefire” contingent on the immediate reopening of the key shipping route.
Financial markets responded positively to the de-escalation. Japan’s Nikkei rose more than 5% in overnight trading, while Hong Kong’s Hang Seng gained 2.8%, as investors welcomed reduced geopolitical risk and improved energy supply outlook.
Trump signals economic opportunity in Strait of Hormuz
Donald Trump has suggested there could be significant financial upside as the US moves to secure the Strait of Hormuz following a de-escalation in the Iran conflict.
In a post on Truth Social, Trump indicated that Iran had “had enough” of the fighting and pointed to increased logistical activity in the region, with the US expected to remain present to ensure stability in the vital shipping route.
He described the development as a “big day for world peace,” adding that efforts to manage traffic through the strait could lead to “lots of positive action” and “big money” opportunities.
