Oil prices fell sharply below $100 a barrel in early Asian trading on Wednesday after President Donald Trump announced a conditional two-week ceasefire agreement with Iran. The development marked a sudden reversal from heightened tensions over the Strait of Hormuz.
At the time of reporting, West Texas Intermediate crude had dropped 14.44 percent to $96.64, while Brent Crude was down 12.97 percent at $95. The steep decline followed Trump’s pledge to suspend military operations against Iran if the country immediately restores safe passage through the strategic waterway.
“This will be a double-sided CEASEFIRE!” Trump posted on social media, softening his earlier warning that “a whole civilization will die tonight” if Iran failed to meet U.S. demands. Iran’s Foreign Minister, Abbas Araqchi, confirmed Tehran would halt attacks provided strikes against the country cease and transit through the strait is coordinated by Iranian forces.
The price drop reversed a surge that had pushed crude above $105 a barrel after Trump’s ultimatum to Iran over reopening the strait. That spike had prompted Dangote Refinery to raise its gantry petrol price to N1,275 per litre in Nigeria on Tuesday. With Wednesday’s decline, the 650,000-barrel-per-day facility is expected to lower petrol prices, potentially easing costs for Nigerian motorists currently paying between N1,290 and N1,350 per litre in Abuja.
The Strait of Hormuz, through which roughly 20 percent of global oil supplies pass, has been a focal point of regional tensions. Any prolonged disruption there typically triggers volatility in global energy markets. The ceasefire announcement provided immediate relief, but analysts caution that lasting stability will depend on both sides adhering to the agreement and addressing underlying disputes.
