Oil down 10.9% as Brent slips below $100 after Trump agrees ceasefire

U.S. oil benchmarks plunged on renewed hopes that a rapid de‑escalation in the Iran conflict could restore supply flows: Brent crude settled at $99.94, down 10.9%, while West Texas Intermediate closed at $88.13, a 10.3% drop; Brent traded as low as $96 intraday. The moves followed President Trump’s late announcement that strikes would be suspended for two weeks provided Iran agreed to fully reopen the Strait of Hormuz.

The sequence began with a string of high‑profile threats from the White House tied to an ultimatum over the Strait of Hormuz, followed by intense diplomatic shuttle efforts, including mediation appeals from Pakistan. In a social‑media post the president said Iran had presented a “workable” basis and that, on condition of the strait’s safe reopening, bombing would be suspended for a fortnight; Iran’s national security body subsequently signalled acceptance of a two‑week ceasefire and agreed to talks. Markets reacted swiftly to the prospect that a major source of supply disruption could be removed.

Financial markets priced the news aggressively: global equities rallied (the S&P 500 gained around 1.1%), the dollar eased and volatility measures retreated as the geopolitical risk premium embedded in oil collapsed. Energy equities underperformed the broader market on profit‑taking after the sharp run‑up earlier in the conflict; futures traders reduced long exposure and rebalanced spreads. Analysts noted the speed of the unwind was exceptional given how quickly the war premium had built up in recent weeks.

From a macro‑economic perspective the Strait of Hormuz is a critical chokepoint — approximately one‑fifth of global oil flows transit the passage in peacetime — so any sustained reopening materially eases tightness in physical markets. Nonetheless, prior disruptions had already raised price baselines above pre‑conflict levels, and persistent operational or political frictions could reintroduce upside pressure. Central banks and fiscal authorities remain alert to second‑round effects of energy‑driven inflation.

Looking ahead, market participants emphasise that the ceasefire’s durability is the key variable. If negotiations hold and shipping through Hormuz normalises, Brent could stabilise in the low‑to‑mid $90s as speculative long positions are unwound; if the truce collapses, the market could rapidly re‑price a significant supply shock. Traders and portfolio managers are therefore prioritising liquidity and event‑driven hedges while monitoring diplomatic developments and physical tanker flows closely.