Oil prices fell sharply in early Asian trading on Wednesday after the US and Iran reached a two-week ceasefire agreement. Iran announced it would permit safe passage for ships through the Strait of Hormuz during this truce, which is significant as this waterway handles about one-fifth of the world’s oil trade. Iranian Foreign Minister Abbas Araghchi confirmed the arrangement, while Iran’s Supreme National Security Council stated that although the ceasefire is in place, it does not signify the end of the conflict.
Diplomatic discussions are set to begin in Islamabad on Friday, marking the first major opportunity for negotiation since the fighting started in February. Reports indicate that the price of US crude, known as West Texas Intermediate, dropped by 16.56% to $96.39 per barrel, while Brent crude fell by 15.89% to $93.38.
In stock markets, Japan’s Nikkei 225 index rose by 4.38% to 55,771.56 points, and South Korea’s Kospi increased by 5.71% to 5,808.65 points, as investors returned to riskier assets following weeks of uncertainty caused by the conflict.
This market relief followed a significant announcement from US President Donald Trump, who stated he would halt attacks on Iran if the country ensured the reopening of the Strait of Hormuz. Shortly after, a senior official in the White House confirmed that Israel had also agreed to pause its bombing activities while negotiations were ongoing. As the deadline approached, Pakistan sought to encourage further diplomatic efforts and requested Trump to allow more time for negotiations.
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