Key Highlights
- Brent crude plummeted 13% to approximately $94 per barrel; WTI tumbled 15% to around $96 per barrel
- Washington and Tehran reached a two-week truce agreement on Tuesday night
- President Trump announced U.S. assistance in facilitating maritime traffic through the Strait of Hormuz
- Tehran’s Foreign Minister verified that Iran will permit secure transit for vessels through the waterway
- Approximately 20% of the world’s petroleum supply passes through the Strait of Hormuz
Crude oil markets experienced a dramatic selloff on Wednesday following the announcement of a two-week ceasefire between Washington and Tehran, significantly reducing concerns about potential disruptions to worldwide petroleum supplies.
Brent crude benchmark tumbled approximately 13% to $94.77 per barrel, while West Texas Intermediate plunged roughly 15% to $96.23 per barrel. During early morning trading sessions, both crude benchmarks touched intraday lows beneath the $92 per barrel threshold.
The diplomatic breakthrough occurred on Tuesday night, moments before President Trump’s self-established 8:00 p.m. Eastern time ultimatum. During the days preceding this deadline, oil prices had climbed to several-month peaks as financial markets braced for a complete escalation of hostilities.
The President had cautioned that non-compliance might trigger devastating consequences. He characterized the potential outcome as a scenario in which “a whole civilization could die.”
Details of the Truce Agreement
President Trump revealed the suspension of combat operations through a Truth Social message. He indicated that the U.S. had successfully achieved its primary military goals and that Tehran had submitted a comprehensive multi-point framework that might serve as the foundation for a broader settlement.
Iran’s Foreign Minister Seyed Abbas Araghchi validated that the nation’s Supreme National Security Council had approved the cessation of military strikes. He stated that maritime vessels would receive “safe passage” authorization through the Strait of Hormuz, contingent upon the cessation of hostile actions and coordination between ships and Iranian officials.
Pakistan served as a crucial intermediary, facilitating negotiations between both parties toward reaching an agreement during the critical hours leading up to the deadline.
President Trump characterized the ceasefire as a “double-sided pause.” He emphasized that the agreement depends on Iran guaranteeing the immediate restoration of access to the strait.
Critical Waterway Restored
The Strait of Hormuz had remained essentially inaccessible for several weeks throughout the military confrontation. This strategic chokepoint facilitates approximately 20% of worldwide petroleum transport, establishing it as among the planet’s most vital maritime corridors.
On Wednesday morning, Trump announced via social media that the U.S. would provide assistance “with the traffic buildup” navigating 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 to the strait represents the primary catalyst behind the market’s swift response. While the passage remained blocked, supply anxieties had driven prices upward. The ceasefire eliminated those immediate concerns, though uncertainties persist.
The truce arrangement is scheduled to remain effective for two weeks. Tehran has verified it will authorize safe maritime passage throughout this timeframe, assuming all parties honor the agreement’s conditions.
