Global oil prices tumbled on Wednesday after the United States and Iran reached a two-week ceasefire agreement. The development, supported by diplomatic efforts from Pakistan, eased worries about a wider conflict and possible disruptions to oil supplies.
Reports indicate that oil prices fell by as much as 19 percent in early trading. Brent crude, a key global benchmark, dropped to around $90 to $94 per barrel, while US West Texas Intermediate crude also saw big losses. This came after days of high tension that had pushed prices well above $100.
The ceasefire includes Iran allowing safe passage for ships through the Strait of Hormuz, a vital route for much of the world’s oil. Both sides agreed to pause attacks for two weeks to allow time for further talks, expected to start soon in Islamabad.
Pakistan’s Role in the Talks
Pakistan helped bring the two sides together. Officials say the country proposed the short-term truce, which Iran accepted with approval from its new Supreme Leader, Mojtaba Khamenei. This move has highlighted Pakistan’s position as a trusted intermediary in the region.
The agreement follows recent escalations that raised fears of major supply problems. With the strait now set to reopen safely for the period, markets reacted with relief.
Market Reaction
International stock markets rose as the news spread. Investors welcomed the reduced risk of prolonged fighting, which had threatened energy costs and global trade.
- Major indices showed gains in Asia and early US futures.
- The drop in oil prices brought immediate relief to businesses worried about higher fuel and transport costs.
Iranian Foreign Minister Abbas Araghchi said Iran would stop its attacks if strikes against the country ended. He added that safe transit through the Strait of Hormuz would be managed in coordination with Iranian forces for the two-week period.
