Oil slides below $100 after US, Iran ceasefire

PERTH -UNS :Global oil prices fell sharply on Wednesday, dropping below the $100-per-barrel mark after Donald Trump announced a two-week ceasefire agreement between the United States and Iran, easing immediate fears of supply disruptions.
Brent crude declined by $14.84, or 13.6%, to settle at $94.43 per barrel, while West Texas Intermediate (WTI) dropped $16.13, or 14.3%, to $96.82 per barrel in early trading. The sharp fall followed weeks of volatility fueled by escalating tensions in the region.
The ceasefire is contingent upon the safe and immediate reopening of the Strait of Hormuz, a critical waterway through which nearly 20% of the world’s oil supply passes. Trump’s announcement came shortly before a deadline he had set for Iran, warning of potential strikes on its infrastructure if the route remained blocked.
In a social media post, Trump described the development as a “double-sided ceasefire,” signaling a shift from earlier warnings of severe conflict. Iranian authorities confirmed that they would halt military actions provided attacks against Iran cease, adding that safe passage through the strait would be ensured in coordination with their armed forces during the truce.
Despite the agreement, tensions remain fragile. Several Gulf countries reported missile launches and drone activity, prompting warnings for civilians to seek shelter. Analysts caution that even with a temporary ceasefire, risks to oil shipments could persist.
Market experts noted that geopolitical uncertainty will likely continue to influence oil prices. The recent conflict triggered one of the steepest monthly increases in oil prices, exceeding 50% in March.
Meanwhile, WTI has traded at a premium over Brent due to nearer-term delivery contracts, reversing the usual pricing trend. Observers say the ceasefire could pave the way for longer-term negotiations, though significant challenges remain.