Oil prices crashed below $100 on Tuesday evening after a surprise truce eased fears over the Strait of Hormuz. U.S. President Donald Trump agreed to pause attacks on Iran for two weeks, securing Tehran’s commitment to safe passage through the vital waterway.
The May West Texas Intermediate contract tumbled more than 16% to $94.47 per barrel by 8:03 p.m. ET, while June Brent futures dropped over 15% to $92.21 per barrel. Trump made the ceasefire contingent on Iran delivering a complete, immediate, and secure reopening of the Strait, calling a 10-point proposal from Tehran a solid foundation for negotiations.
“Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated,” Trump posted on social media.
Iran’s Foreign Minister Seyed Abbas Araghchi confirmed that Tehran would facilitate safe transit via coordination with its armed forces, respecting technical limits during the truce. “If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations,” he added in a social media update.
The deal landed just shy of Trump’s 8 p.m. ET deadline, dodging threatened bombardments of Iran’s bridges and power plants. Earlier, the president had issued a chilling forecast. “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will,” he warned online.
Pakistan’s Prime Minister Shehbaz Sharif deserves credit for the breakthrough, having urged Trump to extend the deadline and pressed Iran for a goodwill reopening, according to reports from his office.
This chokepoint, which channels roughly 21 million barrels of oil daily from the Persian Gulf per International Energy Agency data, has seen exports plummet since Iranian strikes on tankers followed U.S. and Israeli actions on 28 February—the worst supply disruption ever recorded.
Petrol prices have surged past £2 per litre in the UK and neared $5 a gallon in the U.S., stoking warnings from oil giants like ExxonMobil of looming global shortages in fuel for planes, ships, and factories unless access fully resumes.
Analysts caution that while the truce averts immediate catastrophe, its fragility could swiftly reverse market gains.