By: Economy Middle east

Oil prices dropped beneath $100 per barrel on Wednesday following President Donald Trump’s announcement of a two-week ceasefire agreement with Iran. This arrangement is contingent upon the immediate and secure restoration of maritime traffic through the Strait of Hormuz.

Brent futures declined by $14.87, representing a 13.61 percent decrease, to reach $94.40 per barrel at 8:28 UAE time. Simultaneously, West Texas Intermediate (WTI) fell by $17.02, or 15.06 percent, to settle at $95.95 per barrel.

The shift in the U.S. position occurred just prior to a deadline set for Iran to reopen the Strait of Hormuz—a corridor for 20 percent of global oil supply—under the threat of extensive strikes against civilian infrastructure.

Securing Strait transit

Iran’s Foreign Minister Abbas Araqchi stated on Wednesday that his country will cease its offensive actions provided that strikes against its territory stop. He noted that safe passage through the Strait of Hormuz will be facilitated for two weeks in coordination with Iranian military forces. This development follows a period where the conflict involving the U.S., Israel, and Iran triggered the most significant monthly surge in oil prices on record, exceeding 50 percent during March.

President Trump indicated that the U.S. is reviewing a 10-point proposal from Iran, describing it as a “workable basis to negotiate” and suggesting that the involved parties have made substantial progress toward a “definitive agreement for long-term peace.”

WTI continues to trade at a premium relative to Brent, which deviates from standard market trends. This reversal stems from WTI contracts being set for May delivery while Brent is positioned for June, indicating that immediate delivery remains more highly valued by the market.