Two weeks of peace, and oil prices plummet! US crude prices plunge 19% after Trump's ceasefire announcement

Tensions between the US and Iran appear to be easing once again. The biggest evidence of this is the US's announcement of a two-week ceasefire. Following this, the international crude oil market has seen a significant decline. 

The biggest impact is being felt on US crude oil, which has seen a massive 19% drop, reaching $91 per barrel. Just a day earlier, US crude prices had exceeded $116 per barrel. 

Experts believe that crude oil prices may fall further. The US President has claimed that this ceasefire was conditional on Iran opening the Strait of Hormuz with immediate effect. Let us also explain the current level of crude oil prices in the international market.

US crude oil crashes

US crude oil prices have completely crashed in the international market. Prices that had reached over $116 per barrel are now hovering around $91 per barrel.

According to international media reports, WTI crude oil prices fell by nearly 19 percent during the trading session to $91.11 per barrel, 

compared to $112.41 per barrel the previous day. This means US oil prices have fallen by $21.3 per barrel. From the day's peak, prices have fallen by 22.50 percent, or $26.46 per barrel. US crude oil prices had reached a 52-week peak of $117.57 per barrel.

Fall in Gulf oil prices

Meanwhile, Gulf oil prices are also experiencing a significant decline. As markets opened on Wednesday, prices fell below $100 per barrel, representing a decline of nearly 15 percent. 

Data shows Brent crude oil prices falling by more than 15 percent during the trading session to $92.82 per barrel. 

This means that Gulf crude oil has lost nearly $18 per barrel compared to Tuesday's price. A day earlier, Brent crude prices were over $109 per barrel, reaching close to $112 per barrel during the trading session.

Declaration of ceasefire

Trump has announced on social media that if Iran immediately opens the Strait of Hormuz, the US will cease any attacks for two weeks. Earlier on Tuesday, he had said on social media that if his demands are not met, an entire civilization will end tonight. 

According to a statement by Foreign Minister Abbas Araqchi on Wednesday, Iran said that if attacks on it stop, it will also stop its attacks. Furthermore, in coordination with the Iranian armed forces, 

safe travel through the Strait of Hormuz will be possible for two weeks. Due to ongoing tensions between the US and Israel, oil prices saw their largest monthly increase in history in March—more than 50%.

Received a 10-point proposal

Trump said the US had received a 10-point proposal from Iran. He described the proposal as a "viable basis" for negotiations and said the two sides were close to reaching a firm agreement for long-lasting peace. 

IG analyst Tony Sycamore wrote in a note that this is a good start and could pave the way for a permanent reopening of the Strait of Hormuz—but there are still many "ifs and buts" (conditions) to be resolved.

Iran
Donald Trump
United States of America