Oil prices plummeted on Tuesday evening as the energy market reacted to news of a ceasefire in the the U.S-Israeli war with Iran.
After President Donald Trump and Iran’s Supreme National Security Council announced they each agreed to the ceasefire, West Texas Intermediate crude oil futures dropped under $100 to its lowest point since late March.
WTI crude oil prices fell over 18% to $91.61 at the time of publication and were continuously declining. The shift is a drastic difference from earlier in the day, when the market had peaked at around $117.
As part of the ceasefire agreement, the Iranians agreed to allow for the safe passage of vessels through the Strait of Hormuz. The Islamic Revolutionary Guard Corps’ chokehold on the crucial oil shipping waterway is in large part what led to the panic in the oil markets after the war broke out.
“If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations,” Iranian Foreign Minister Abbas Araghchi said in a statement on behalf of the Supreme National Security Council. “For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations.”
Trump was the first to publicly agree to the ceasefire, posting on Truth Social that the U.S. would agree to the terms contingent on the reopening of the strait.
“Subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump wrote.
TRUMP AGREES TO TWO-WEEK CEASEFIRE WITH IRAN IF STRAIT OF HORMUZ REOPENED
Within 30 minutes of Trump posting news of the ceasefire on Truth Social, the price of oil fell from about $107 to under $100.
Prices had been high earlier in the day as Trump’s 8 p.m. deadline for peace loomed, and he warned that “a whole civilization will die tonight” if the two sides did not come to an agreement.
