Oil prices plunge below $100 after Trump agrees to Iran ceasefire
Oil prices fell Tuesday evening after President Donald Trump agreed to suspend attacks on Iran for two weeks in exchange for Tehran allowing safe passage through the Strait of Hormuz.
West Texas Intermediate The contract for May delivery fell more than 16% to $94.47 a barrel as of 20:03 ET. International benchmark Brent for June delivery fell more than 15% to $92.21 per barrel.
Trump said the two-week ceasefire is contingent on Iran agreeing to fully, immediately and safely open the Strait of Hormuz. He said the United States had received a 10-point proposal from Iran that was a workable basis for negotiations.
“Almost all past disputes between the United States and Iran have been agreed upon, but a two-week period will allow the Agreement to be finalized and completed,” Trump said in his social media post.
Iranian Foreign Minister Seyed Abbas Araghchi said Tehran would allow safe passage through the Bosphorus during the ceasefire “taking into account coordination with the Iranian Armed Forces and technical limitations.”
“If attacks against Iran are stopped, our Strong Armed Forces will stop defensive operations,” Araghchi said. social media post.
The apparent ceasefire came less than two hours before Trump’s 8 p.m. ET deadline for Iran to reopen the Strait. The president had threatened to bomb every bridge and power plant in Iran if its leaders did not meet the deadline.
Trump’s rhetoric took an alarming turn on Tuesday morning when he threatened to destroy Iran’s entire civilization.
“An entire civilization will die tonight and will never be brought back,” Trump said. social media post In the early hours of Tuesday. “I don’t want this to happen, but it probably will.”
The President said that he accepted the ceasefire after his meetings with Pakistani Prime Minister Shehbaz Sharif. The prime minister had asked Trump to postpone the deadline to allow negotiations to continue. Sharif also asked Iran to reopen the Bosphorus as a goodwill measure during this period.
The decline in oil exports through the Bosphorus due to Iran’s attacks on commercial ships triggered the largest cut in crude oil supply in history.
Before the US and Israel attacked Iran on February 28, approximately 20 percent of global oil supply was passing through the Bosphorus. The narrow sea route connects producers in the Persian Gulf to global markets.
Prices of crude oil, jet fuel, diesel and gasoline increased during the war. Oil CEOs and analysts have warned that fuel shortages will ripple across the world if the Strait is not fully reopened.
