Quick overview

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Crude prices plunged while financial assets rebounded after the U.S. president announced a ceasefire agreement with Iran, easing market concerns about disruptions to global energy flows.

Oil prices fell by as much as 17% and Wall Street futures jumped up to 3.3% after Donald Trump, president of the United States, said he had agreed to a ceasefire with Iran.

The May futures contract for West Texas Intermediate (WTI) crude dropped $12.04, or 16.7%, to $94.07 per barrel. Meanwhile, Brent crude had closed the session down 5.8% at $103.42 per barrel.

The announcement came shortly before the deadline Trump had set for Iran to reopen the Strait of Hormuz, a critical shipping route through which roughly 20% of the world’s oil supply passes.

Trump said the agreement was conditional on Iran suspending its blockade of oil and gas shipments through the strait, which typically handles around one-fifth of global oil flows.

“Based on the conversations held with Prime Minister Shehbaz Sharif (…) in which they asked me to stop the destructive force that was going to be sent tonight to Iran, and provided that the Islamic Republic of Iran accepts the FULL, IMMEDIATE and SAFE reopening of the Strait of Hormuz, I agree to suspend the bombings and attacks against Iran for a period of two weeks,” Trump wrote on social media.

“This will be a reciprocal CEASEFIRE,” he added.