Oil prices plunged below $100 a barrel after the US and Iran agreed to a two-week ceasefire that includes the reopening of the Strait of Hormuz.
Oil prices have fallen sharply while both European and Asian markets surged on Wednesday after the US and Iran agreed to a two-week ceasefire that includes reopening the Strait of Hormuz.
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Although traders remain cautious until the truce proves durable, markets are reflecting the newfound optimism that the conflict will completely cease.
Brent crude stood at around $95 per barrel as of Wednesday morning, up almost 30% since the war began in late February but well below the peaks of recent weeks of $110 per barrel.
WTI crude sat at roughly $96 per barrel, still up more than 40% from pre-war levels despite the ceasefire-driven selloff. Wholesale gasoline was at $2.94 per gallon, also up more than 40% since the conflict began.
The moves follow a dramatic overnight plunge after US President Donald Trump said he was holding off on threatened strikes against Iranian bridges, power plants and other civilian infrastructure.
Iran's foreign minister confirmed the Strait of Hormuz would be open to shipping for the next two weeks under Iranian military management.
Asia surges, Europe slides
Asian markets responded with enthusiasm. Japan's Nikkei 225 gained 5.0% in early Wednesday trading, South Korea's Kospi soared 5.9% and Hong Kong's Hang Seng jumped 2.6%.
As for European markets, the Euro Stoxx 50 is up more than 3% in early trading while the broader pan-European Stoxx 600 is over 4% higher and eyeing the largest daily increase since April 2025.
The UK's FTSE 100 has jumped almost 2% while Germany's DAX 30 is around 1% higher, and France's CAC 40 and Italy’s FTSE MIB have both risen more than 3% each.
On Wall Street, US futures are all trading between 2% and 3% higher with Nasdaq futures seeing the biggest increase of around 3.2% at the time of writing.
During Tuesday's session US equities swung lower before clawing back losses after Pakistan's prime minister urged Trump to extend his deadline and called on Iran to reopen the strait.
Attacks were still reported in Israel, Iran and across the Gulf region in the early hours of Wednesday, and neither side has specified when the truce formally begins.
The worry that has stalked markets since late February still remains, namely that a prolonged disruption to Gulf oil flows will keep energy prices elevated long enough to push a fresh wave of inflation through the global economy — with or without a ceasefire.
