Oil slides after Trump agrees to conditional two-week Iran ceasefire

Oil Slides After Trump Agrees to Conditional Two-Week Iran Ceasefire

Following President Donald Trump’s announcement of a two-week ceasefire with Iran, global oil prices experienced a notable decline. US-traded crude fell by approximately 16.5%, reaching $93.80 per barrel. However, the market remains above pre-conflict levels, which began on 28 February.

Energy costs surged due to disruptions in Middle Eastern oil and gas supplies caused by Iranian threats to target ships traversing the strategic Strait of Hormuz. This escalation came in response to US and Israeli airstrikes, which had previously raised concerns about regional stability.

“I agree to suspend the bombing and attack of Iran for a period of two weeks… subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz,” Trump stated in a social media post.

He established a deadline for 20:00 EDT on Tuesday (00:00 GMT on Wednesday), warning that “a whole civilisation will die tonight” if no agreement was reached. Despite this ultimatum, analysts suggest Trump’s move to halt hostilities was driven by a desire to prevent further economic strain.

Xavier Smith of AlphaSense noted that Trump’s decision to pause military actions reflected caution about allowing energy prices to soar. Such a scenario could create a “self-inflicted economic wound” that few leaders would willingly endure, especially with upcoming challenges to his approval ratings looming.