New Delhi: Global crude oil prices on Wednesday plunged sharply up to 20 per cent, after US President Donald Trump announced a two-week ceasefire with Iran that includes a pledge to restore navigation through the Strait of Hormuz — the narrow waterway at the heart of the world’s most acute energy crisis in decades.
The international benchmark Brent crude futures shed nearly 16 per cent or $17.39 to $91.88, hitting an intraday low, while US WTI crude declined almost 20 per cent or $21.90 to $91.05.
The Strait of Hormuz, through which roughly a fifth of global oil flows, has been at the centre of the conflict. Iran had restricted passage for several weeks, contributing to rising prices and supply concerns. Markets had been on edge ahead of Trump’s deadline for Iran to reach a deal, with traders fearing a major escalation could disrupt shipments across the Gulf and send prices sharply higher.
Oil prices had surged in recent weeks amid fears that the strait could be closed or severely restricted. The waterway handles shipments critical to global supply chains, including crude oil and liquefied natural gas.
The US-Israel-Iran conflict has been paused for two weeks after approximately 40 days of hostilities that began in February.
President Trump’s shift in stance came just ahead of his stated deadline for Iran to reopen the Strait of Hormuz or risk extensive strikes on its civilian infrastructure.
Meanwhile, Iran indicated it would halt its military operations provided attacks against it ceased simultaneously. Foreign Minister Abbas Araghchi, in a formal statement, confirmed that safe passage through the Strait of Hormuz would be ensured for two weeks in coordination with Iranian armed forces.
The conflict had triggered an unprecedented surge in oil prices in March, with gains exceeding 60 per cent during the period.
Additionally, Indian equity benchmarks also rallied sharply on the development, trading more than 3 per cent higher in early trade. The Sensex jumped nearly 4 per cent, while the Nifty surged 3.5 per cent to their respective intraday highs.
(IANS)
