Global oil markets witnessed a sharp sell-off of over 15 percent on Wednesday after the United States and Iran agreed to a temporary two-week ceasefire with Pakistan mediating the much anticipated talks.
Brent crude futures fell nearly 16 percent, falling to $91.72 per barrel from the previous close of $109.27. At the time of press, Brent was down 13.31 percent to $94.7, while Western Texas Immediate (WTI) lost 15 percent to trade at $95 per barrel
The dramatic decline followed diplomatic progress achieved by Pakistan to convince both Washington and Tehran to halt the war for two weeks.
Iran’s Foreign Minister Seyed Abbas Araghchi announced that Tehran would permit safe maritime passage through the strategically vital Strait of Hormuz for the next two weeks. This also caused crude oil to crash.
US President Donald Trump confirmed via social media that Washington would suspend bombing against Iran during the ceasefire period.
He described the arrangement as a “double-sided ceasefire,” saying military objectives had largely been achieved and both sides were nearing a broader agreement aimed at long-term regional peace.
According to Trump, most major disputes between the two countries have already been addressed.