LONDON, April 8 – Oil prices fell sharply below $100 a barrel after the United States and Iran agreed to a two-week ceasefire, easing concerns over disruptions to global energy supply.
Brent crude dropped as much as 16% before stabilising near $94 a barrel, while West Texas Intermediate recorded its steepest decline in nearly six years, trading around $96.
The move follows an agreement that could see the reopening of the Strait of Hormuz, a critical route for global oil shipments.
Donald Trump said the ceasefire is conditional on Iran restoring access through the strait, a development expected to reduce pressure on global supply chains and calm energy markets.
Iran signaled its acceptance of a ceasefire proposal brokered by Pakistan, with Foreign Minister Abbas Araghchi indicating that safe passage through the waterway could be coordinated for a limited period. Israel has also agreed to the pause, according to US officials.
The easing of tensions triggered a broader selloff across energy markets. European diesel futures fell as much as 23%, marking their largest drop in over four years, while futures tied to Abu Dhabi’s Murban crude declined sharply.
Market participants say the trajectory of oil prices will depend heavily on the durability of the ceasefire and the outcome of further negotiations. Talks involving US and Iranian officials are expected to continue, with a potential meeting in Islamabad aimed at reaching a longer-term resolution.
Despite the sharp decline, analysts caution that prices remain highly sensitive to geopolitical developments. Any breakdown in negotiations or renewed disruption in the Strait of Hormuz could quickly reverse recent losses and push crude back above $100 a barrel.
