Tensions between the US and Iran appear to be easing once again. The biggest evidence of this is the US’s announcement of a two-week ceasefire. Following this, the international crude oil market has seen a significant decline. The biggest impact is being felt on US crude oil, which has dropped 19% to $91 per barrel. Just a day before, US crude prices had exceeded $116 per barrel.
Experts believe that crude oil prices may fall further. The US President has claimed that this ceasefire was conditional on Iran opening the Strait of Hormuz with immediate effect. Let us also explain the current level of crude oil prices in the international market.
US Crude Oil Crashes
US crude oil prices have completely crashed in the international market. Prices that had reached above $116 per barrel are now hovering around $91 per barrel. According to international media reports, WTI crude oil prices fell nearly 19 per cent during the trading session to $91.11 per barrel. The market closed at $112.41 per barrel the previous day. This means that US oil prices have fallen by $21.3 per barrel. From the day’s peak, prices have fallen by 22.50 per cent, or $26.46 per barrel. US crude oil prices had reached a 52-week peak of $117.57 per barrel.
Gulf oil prices are also experiencing a significant decline. At market open on Wednesday, Gulf oil prices fell below $100 per barrel, down nearly 15 per cent. Data show that Brent crude oil prices fell by more than 15 per cent during the trading session, reaching $92.82 per barrel. This means that Gulf crude oil has lost nearly $18 per barrel compared to Tuesday’s price. A day earlier, Brent crude prices were over $109 per barrel, reaching close to $112 per barrel during the trading session.
Ceasefire Announcement
Trump has announced on social media that if Iran immediately opens the Strait of Hormuz, the US will cease any attacks for two weeks. Earlier on Tuesday, he had also stated on social media that an entire civilisation would end tonight if his demands were not met.
According to a statement by Foreign Minister Abbas Araqchi on Wednesday, Iran said that if attacks on Iran cease, it will also cease its attacks. Furthermore, in coordination with the Iranian armed forces, safe travel through the Strait of Hormuz will be possible for two weeks. Ongoing tensions between the US and Israel, along with Iran, led to the largest monthly increase in oil prices in history in March—a gain of over 50%.
10-Point Proposal Received
Trump said the US had received a 10-point proposal from Iran. He described the Proposal as a “workable basis” for negotiations and said the two sides were close to reaching a solid agreement for long-lasting peace. IG analyst Tony Sycamore wrote in a note that this is a good start and could pave the way for the permanent reopening of the Strait of Hormuz—but there are still many “ifs and buts” (conditions) that need to be addressed.
