Oil prices plunge in response to Middle East ceasefire

Oil prices in Asia are plunging, with North Sea Brent falling below 94 USD per barrel. The reason is a newly announced two-week ceasefire in the Middle East, which has brought relief to the market and raised hopes that oil and gas flows through the Strait of Hormuz, a key artery of global energy trade, will resume.

At around 07:45 CEST, the price of North Sea Brent was down 14 percent at 93,93 dollars per barrel. US light crude WTI was down 15,3 percent, trading at 95,69 dollars per barrel.

Markets have been volatile in recent weeks amid escalating tensions following US and Israeli strikes on Iran, which began at the end of February. Tehran subsequently restricted traffic through the Strait of Hormuz, which normally carries roughly a fifth of global oil and gas supplies, raising concerns about supply disruptions and pushing prices higher.

US President Donald Trump said early today CEST that he had agreed to suspend strikes on Iran for two weeks and was ready for a ceasefire. Tehran had submitted a ten-point proposal that could serve as a workable basis for further negotiations, he said. The two-week period is intended to help reach a final agreement. Trump made the ceasefire conditional on the opening of the Strait of Hormuz, to which Tehran agreed, according to Iranian Foreign Minister Abbas Araghchi. Araghchi also said that passage through the Strait of Hormuz would be permitted over the next two weeks