Oil prices fall below $100 as Iran-US ceasefire kicks in after last minute Strait of Hormuz deal

Oil prices fell sharply on Tuesday (Apr 7) after the United States and Iran agreed to a temporary ceasefire. Oil plunged, and Asian stock indices were surging within hours of the temporary relief announced on the 38th day of the Iran war, in a dramatic reversal of the anxiety that has gripped global markets since the conflict began in late February. West Texas Intermediate, the main US crude benchmark, plunged more than 17 per cent to around $93 a barrel by late Wednesday GMT. Brent Crude wasn't far behind, dropping nearly 16 per cent to $93.38. This comes as Iran allowed safe passage through the Strait of Hormuz for a period of two weeks.

Markets breathe sigh of relief

The relief on equity markets was equally sharp. Japan's Nikkei 225 jumped 4.38 per cent, while South Korea's Kospi rocketed 5.71 per cent. "As fears of an escalation in fighting dispelled, buying is likely to take the lead in the Japanese market," Tokai Tokyo Securities said ahead of the Tokyo open.

Just hours earlier, in a post on X, Iranian Foreign Minister Seyed Abbas Araghchi announced a temporary reopening of the Strait of Hormuz, the chokepoint whose closure has rattled global energy markets, sent oil prices surging past $100 a barrel, and pushed several Asian nations toward fuel rationing in recent days.

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