Oil plunges after US-Iran ceasefire deal to reopen Strait of Hormuz

The agreement was announced not long before Trump's Tuesday evening deadline was reached.

Asian stock markets surged on Wednesday following a sharp drop in oil prices due to a newly announced two-week ceasefire between the U.S. and Iran, including the partial reopening of the critical Strait of Hormuz. The ceasefire prompted Japan’s Nikkei 225 to rise by 5.0%, South Korea’s Kospi by 5.9%, and Australia's S&P/ASX 200 by 2.6%, among others. Oil prices dropped significantly, with U.S. crude falling by $16.84 to $96.11 per barrel and Brent crude decreasing by $14.51 to $94.76. The oil market’s prior volatility was largely due to restricted access to the Strait of Hormuz, a key route for global oil shipments. Although optimism is tempered by the ceasefire’s short duration, markets hope it may lead to a more enduring peace. On Wall Street, the S&P 500 ended flat, while the Dow dipped slightly and the Nasdaq edged higher. Treasury yields also eased, reflecting investor caution, and the U.S. dollar weakened slightly against the yen and euro. The ceasefire was influenced by diplomatic urging, including Pakistan's call for an extension and Iran’s conditional concession to allow passage through the strait.

Oil prices have dived, bonds rallied, and stocks surged as a two-week ceasefire involving Iran spurred a relief rally, with investors cheering the possible resumption of oil and gas flows through the Strait of Hormuz.

Stocks soared and oil plunged in early trade in Asia on Wednesday after the United States and Iran agreed to a two-week ceasefire, with Tehran temporarily to reopen the vital Strait of Hormuz.

Iran is demanding to collect tolls in the Strait of Hormuz as a condition for reopening the strategic waterway following a war with the U.S. and Israel. This proposal violates established international maritime law, specifically the United Nations Convention on the Law of the Sea, which guarantees freedom of passage through vital straits.

Oil prices plunged below $100 a barrel after the US and Iran agreed to a two-week ceasefire that includes the reopening of the Strait of Hormuz. Oil prices have fallen sharply and Asian markets surged on Wednesday after the US and Iran agreed to a two-week ceasefire that includes reopening the Strait of Hormuz but traders are cautious so far until the truce proves durable.

Oil prices plunged below $100 a barrel after the US and Iran agreed to a two-week ceasefire that includes the reopening of the Strait of Hormuz. Oil prices have fallen sharply and Asian markets surged on Wednesday after the US and Iran agreed to a two-week ceasefire that includes reopening the Strait of Hormuz but traders are cautious so far until the truce proves durable.

Both benchmarks dropped after the US said it would pause bombing and Tehran agreed to reopen Strait of Hormuz. A gas tanker waits near the Strait of Hormuz, which is to reopen under the terms of a US-Iran ceasefire. Reuters. A gas tanker waits near the Strait of Hormuz, which is to reopen under the terms of a US-Iran ceasefire. Reuters. A gas tanker waits near the Strait of Hormuz, which is to reopen under the terms of a US-Iran ceasefire. Reuters. A gas tanker waits near the Strait of Hormuz, which is to reopen under the terms of a US-Iran ceasefire. Reuters.

Stocks soared and oil plunged in early trade in Asia on Wednesday after the United States and Iran agreed to a two-week ceasefire, with Tehran temporarily to reopen the vital Strait of Hormuz. On oil markets, the US crude benchmark West Texas Intermediate (WTI) tumbled 16.56 percent to $96.39 per barrel, while Brent Crude was down 15.89 percent at $93.38.