In brief
Global oil prices experienced a sharp decline of nearly 16% after President Trump announced a conditional two-week ceasefire with Iran. The ceasefire hinges on the safe passage of vessels through the Strait of Hormuz, critical for oil transport. Despite this drop, prices remain elevated compared to pre-conflict levels as tensions in the Middle East continue to disrupt oil and gas supplies.
Global oil prices have fallen sharply since President Donald Trump announced a two-week ceasefire between the US and Iran if vessels are allowed to move through the key Strait of Hormuz waterway.
The price of benchmark Brent crude fell about 15.9% to $92.30 (£68.87) a barrel, while US-traded oil was almost 16.5% lower at $93.80.
But prices remain higher than before the conflict started on 28 February.
The cost of energy has jumped as oil and gas supplies from the Middle East have been severely disrupted by Iranian threats to attack ships trying to use the strait in retaliation for US and Israeli airstrikes.
In a social media post on Tuesday evening, Trump said: 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.
He had set a deadline for 20:00 EDT on Tuesday (00:00 GMT on Wednesday), threatening that a whole civilisation will die tonight if no deal was reached.
Despite his threats, Trump was likely to be wary about letting energy prices skyrocket by escalating the conflict, said Xavier Smith from market research firm AlphaSense.
That could have led to a self-inflicted economic wound that few would risk, especially given the looming pressure of approval ratings on Trump's leadership, said Smith.
