Oil prices dropped below $100 a barrel on Wednesday after United States (US) President Donald Trump announced a two-week ceasefire agreement with Iran, linked to the reopening of the Strait of Hormuz.
Brent crude fell by $14.51, or 13.3%, to $94.76 a barrel and US West Texas Intermediate (WTI) declined by $17.16, or 15.2%, to $95.79 a barrel.
The announcement came shortly before a deadline set by Trump for Iran to reopen the Strait of Hormuz or face attacks on civilian infrastructure. The route handles about 20% of global oil shipments.
Trump shared the update on Truth Social, writing, “This will be a double-sided CEASEFIRE!” Hours earlier, he had warned that “a whole civilization will die tonight” if his demands were not met.
Iran said that it would stop its actions if attacks against it ceased. In a statement issued on Wednesday, Iran’s Foreign Minister Abbas Araqchi said that safe passage through the Strait of Hormuz would be ensured for two weeks in coordination with Iranian armed forces.
Despite the announcement, reports from several Gulf states pointed to missile launches and drone activity, while authorities issued warnings asking residents to take shelter.
The developments follow a period of rising oil prices during the conflict involving the US, Israel and Iran. In March, prices recorded an increase of more than 50%, marking the steepest monthly rise on record.
Trump said Washington had received a 10-point proposal from Iran, describing it as a workable basis for talks. He added that both sides were moving closer to a broader agreement aimed at long-term peace.
“It’s a good start and could pave the way to a more permanent reopening – but lots of ifs still to work out,” he said.
WTI continued to trade above Brent, reflecting a shift from usual pricing patterns. The difference is linked to delivery timelines, with WTI contracts for May and Brent for June, indicating stronger demand for earlier supply.
