Oil prices plunge 12% after Trump agrees to suspend bombing and attack of Iran for 2 weeks

Oil prices fell by 12% and U.S. stock futures rose sharply on Tuesday evening after President Donald Trump declared a “double-sided ceasefire” in the conflict with Iran. This announcement came at the request of Pakistan, which has been acting as a mediator in recent discussions. In a social media message, Trump stated that the ceasefire depends on Iran agreeing to the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.” As a result, the price of U.S. crude oil dropped over 15% to $95 per barrel, a dramatic fall from $117 earlier in the day. Futures for the S&P 500 increased by more than 2%, while Dow futures surged by 1,000 points, and Nasdaq 100 futures rose by 2.6%. Futures linked to the Russell 2000 index climbed by 2.8%. Other energy prices, including natural gas, wholesale RBOB gasoline, and heating oil, which is used as jet fuel, also saw significant declines following the news of a possible ceasefire. Despite the drop on Tuesday night, U.S. crude oil prices have still increased by over 70% since the start of the year. Since early March, shipping traffic through the Strait of Hormuz has largely stopped, as tankers have been cautious about entering the narrow waterway near the Iranian coast. There have been threats to ships, and some have been attacked with drones and missiles. Typically, the Strait of Hormuz is responsible for transporting more than 20% of the world’s oil supply to global markets.