Ceasefire deal reopens Strait of Hormuz, sends oil prices tumbling

Oil prices fell sharply below USD 100 while global markets rallied after the US and Iran agreed to a two-week ceasefire, reopening the Strait of Hormuz and easing tensions despite continued sporadic attacks across the region

By STAN CHOEAP

New York:  Oil prices plunged below USD 100 a barrel and Asia markets and US stock futures jumped after the US and Iran agreed to a two-week ceasefire that includes the reopening of the Strait of Hormuz.

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Japan’s benchmark Nikkei 225 rose 4.8% and South Korea’s Kospi gained 5.6%. Futures for the S&P 500 advanced 2.3% as of 9:30 pm EDT, while Dow futures rose 2%.

Futures for US crude oil sank 14.3% to $96.83 a barrel and Brent crude oil, the international standard, dropped 13.3% to $94.74. Oil prices had spiked because the war snarled the production and transportation of crude in the Persian Gulf. Much of that oil exits the gulf through the Strait of Hormuz to reach customers around the world, but Iran had blocked it to enemies.

Late Tuesday, Trump said he was holding off on his threatened attacks on Iranian bridges, power plants and other civilian targets. Iran’s foreign minister said passage through the strait would be allowed for the next two weeks under Iranian military management.

The dramatic moves in prices are just the latest swings to hit financial markets since late February because of constantly shifting signals about when the conflict may end.

Even with word of a ceasefire, neither Iran nor the United States said when it would begin, and attacks took place in Israel, Iran and across the Gulf region early Wednesday.