Key Highlights
- Brent crude tumbled 13% to approximately $94 per barrel; WTI plunged 15% to roughly $96 per barrel
- Washington and Tehran reached a two-week truce agreement on Tuesday night
- President Trump announced U.S. assistance in restoring shipping operations through the Strait of Hormuz
- Iran’s Foreign Minister verified that Tehran will permit secure vessel passage through the waterway
- Approximately 20% of the world’s oil supply passes through the Strait of Hormuz
Crude oil markets experienced a significant selloff on Wednesday following the announcement of a two-week truce between Washington and Tehran, alleviating concerns about potential disruptions to worldwide petroleum supplies.
Brent crude experienced a decline of approximately 13% to reach $94.77 per barrel. West Texas Intermediate saw a roughly 15% decrease to $96.23 per barrel. During early morning trading sessions, both benchmark indices touched intraday lows beneath $92 per barrel.
The agreement was finalized on Tuesday night, moments before President Trump’s self-established 8:00 p.m. Eastern time ultimatum. During the days leading up to this deadline, oil prices had climbed to multi-month peaks as investors grew increasingly concerned about a full-scale escalation of hostilities.
The President had cautioned that non-compliance could trigger devastating consequences. He characterized the possible outcome as one in which “a whole civilization could die.”
Details of the Truce Agreement
The President revealed the pause in military operations through a Truth Social post. He indicated that U.S. forces had already achieved their primary military goals and that Tehran had presented a comprehensive proposal that could serve as the foundation for a broader settlement.
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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Seyed Abbas Araghchi, Iran’s Foreign Minister, validated that the nation’s Supreme National Security Council had agreed to cease attacks. He announced that commercial vessels would receive “safe passage” through the Strait of Hormuz, contingent upon the cessation of hostilities and proper coordination with Iranian officials.
Pakistan served as a crucial intermediary, facilitating negotiations and encouraging both parties to reach an accord during the critical hours preceding the deadline.
The President characterized the truce as a “double-sided pause,” emphasizing that its continuation depends on Iran guaranteeing the immediate resumption of strait operations.
Critical Waterway Resumes Operations
The Strait of Hormuz had been essentially blocked for several weeks throughout the conflict. This narrow passage facilitates roughly 20% of the planet’s oil transportation, establishing it as one of the most vital maritime corridors globally.
On Wednesday morning, Trump announced via social media that the United States would assist “with the traffic buildup” moving through the strait. His message stated: “There will be lots of positive action! Big money will be made. Iran can start the reconstruction process.”
The restoration of access through the strait represents the primary catalyst behind the market’s dramatic response. While the passage remained closed, supply anxieties had driven prices upward. The truce eliminated that threat, at least for the immediate future.
The ceasefire agreement remains in effect for a two-week period. Tehran has pledged to guarantee safe passage throughout this timeframe, assuming both parties honor the agreement’s conditions.
