Oil prices plunged in early Asian trade on Wednesday after the US and Iran agreed to a two-week ceasefire.
Iran said it would allow ships to pass safely through the Strait of Hormuz for two weeks as part of the temporary truce, reopening a route that carries about one-fifth of global oil trade. Iranian Foreign Minister Abbas Araghchi confirmed safe passage through the strait for that period, while Iran’s Supreme National Security Council also confirmed acceptance of the temporary ceasefire, stressing that the pause did not mean the war was over.
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Talks are expected to begin in Islamabad on Friday, marking the first major diplomatic off-ramp since the conflict erupted in February.
AFP reported that the US crude benchmark West Texas Intermediate tumbled 16.56% to $96.39 per barrel, while Brent crude fell 15.89% to $93.38.
In equities, Japan’s Nikkei 225 rose 4.38% to 55,771.56 points, while South Korea’s Kospi surged 5.71% to 5,808.65, as investors rushed back into risk assets after weeks of war-driven volatility.
The market relief followed a dramatic announcement by US President Donald Trump, who said he would suspend bombing and attacks on Iran for two weeks if Tehran guaranteed the “complete, immediate, and safe” reopening of the Strait of Hormuz.
Minutes after Trump’s announcement, a senior White House official told CNN that Israel had also agreed to suspend its bombing campaign while negotiations continued.
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Russia and China Veto US-Backed UN Resolution on Hormuz
As Trump’s deadline neared, Pakistan sought more time for diplomacy, while Russia and China vetoed a US-backed UN resolution on Hormuz.
Pakistan, which has emerged as a key intermediary between Washington and Tehran, on Tuesday urged Trump to extend his deadline for Iran to end its blockade of Gulf oil. Pakistani Prime Minister Shehbaz Sharif said he had asked Trump to give diplomacy more time and appealed to Iran to reopen the Strait of Hormuz for the same two-week period as a goodwill gesture.
