Oil prices plunge as Trump announces two-week Iran war ceasefire
Global oil prices have dropped sharply after Donald Trump announced a two-week ceasefire in the ongoing conflict between the United States and Iran.
The price of benchmark Brent crude fell by around 14%, dropping below $100 to approximately $94 per barrel. The sudden decline has brought relief to global markets, although prices remain significantly higher than pre-war levels.
The easing of tensions has also triggered a strong rebound in stock markets worldwide. Investors responded positively to signs that the conflict may temporarily de-escalate, with major indices across Europe and Asia posting significant gains.
A key factor behind the drop in oil prices is the reported reopening of the Strait of Hormuz, one of the world’s most critical oil and gas transit routes. The waterway had been heavily impacted during the conflict, disrupting global energy supplies and driving prices upward.
Gas prices have also seen a notable decline. In the UK, wholesale gas prices fell by more than 18%, reaching levels last seen in early March. This offers some relief to households and businesses that have been struggling with high energy costs.
However, analysts warn that supply issues are far from resolved. Oil and gas production facilities that were shut down during the conflict will take time to return to full capacity. Similarly, refineries that rely on crude oil supplies will need time to resume normal operations.
These delays mean that while prices have dropped, consumers may not see immediate benefits at the pump or in energy bills. Petrol, diesel, and fertiliser costs are expected to remain elevated in the short term.
The broader economic impact is also being reassessed. Rising energy costs had previously led traders to predict multiple interest rate hikes in 2026. However, with prices now easing, expectations have shifted to just one potential rate increase later in the year.
Currency markets have reacted as well, with the British pound strengthening slightly against the US dollar following the news.
Stock markets have seen particularly strong gains. The UK’s FTSE 100 index rose by more than 2%, while Asian markets experienced even larger jumps. South Korea’s Kospi surged nearly 7%, and Japan’s Nikkei climbed by over 5%, reflecting renewed investor confidence.
Despite the positive reaction, uncertainty remains. Experts caution that the situation could change quickly if tensions flare up again or if supply disruptions persist.
For now, the ceasefire has brought a temporary sense of stability to global energy markets, offering a brief pause in what has been a highly volatile period.
