Brent Crude Falls Over 5%, WTI Down 15% As Donald Trump Agrees To A Temporary Ceasefire With Iran

Brent prices have fallen sharply following US President Donald Trump's announcement of a temporary ceasefire, just hours after he threatened to end the Iran civilisation. Brokered by the Pakistani government, Trump has confirmed he has ordered his troops to call off the strikes on Iran, which has agreed to the two-week ceasefire proposal.

Perhaps most importantly, Iran's foreign minister Seyed Abbas Araghchi has confirmed that safe passage through the Strait of Hormuz during these two weeks may be possible, provided the United States halts all attacks on the country.

This development has put downward pressure on Brent Crude, which is trading with cuts of almost 6% at $103 per barrel. West Texas Intermediate (WTI), which correlates more with the US economy and markets, has fallen even more sharply, with cuts of almost 15% to trade at $96 per barrel. 

ALSO READ: US President Donald Trump Calls Off Iran Strikes: Is Strait Of Hormuz Open Now?

This comes after a sustained period of volatility in global oil markets, owing to continued unrest in the Middle East and the closure of the Strait of Hormuz.

The US is now expected to use the two-week window to try to negotiate a final agreement with Iran, which has already acknowledged the Trump administration's 15-point proposal. Iran itself has put out a ten-point proposal, as confirmed by the foreign minister.

The next few weeks, therefore, could be critical as the US, Iran and Israel indulge in negotiations and bring an end to the war that has lasted six weeks now, much to the detriment of global oil markets and the energy sector.

ALSO READ: Brent May Ease To $80/Barrel By Year-End, Says Goldman Sachs After Middle East War Spike

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