Oil prices fell sharply after US President Donald Trump announced a two-week pause in planned military strikes on Iran, easing fears of a wider conflict in the energy-rich Gulf region.
Global crude benchmarks recorded steep declines, with Brent crude dropping nearly 16 per cent (about $17.39) to $91.88, while US WTI crude plunged almost 20 per cent (around $21.90) to $91.05. Earlier, US crude futures had slipped below $100 a barrel, reversing gains driven by weeks of tensions around the Strait of Hormuz.
The decline followed Trump's announcement that he would suspend attacks on Iran, subject to Tehran reopening the strategically vital Strait of Hormuz — a route through which roughly a fifth of global oil supplies pass. The waterway had been partially restricted by Iran in recent weeks, contributing to supply concerns and a surge in prices.
Markets reacted positively to the development. US stock futures rose more than 2 per cent, while Asian markets also advanced, with Japan's Nikkei and South Korea's Kospi posting gains. Indian equity benchmarks rallied sharply, with the Sensex jumping nearly 4 per cent and the Nifty rising around 3.5 per cent in early trade.
The broader conflict, involving the US, Israel and Iran, had lasted about 40 days and triggered extreme volatility in energy markets. Oil prices had surged over 60 per cent during the period amid fears that the Strait of Hormuz — a critical global energy chokepoint — could be shut or severely disrupted.
Trump's decision to step back came just ahead of his deadline for Iran to reopen the strait or face extensive strikes on key infrastructure. The ceasefire is conditional, hinging on Iran ensuring safe and full reopening of the route.
Iran signalled its willingness to cooperate. Foreign Minister Abbas Araghchi said Tehran would halt military operations if attacks against it cease, adding that safe passage through the strait would be maintained for two weeks in coordination with Iranian armed forces.
The easing of tensions lifted broader market sentiment, though some uncertainty remains. Gold prices edged higher, reflecting lingering caution among investors, while analysts warned that the situation remains fragile. Reports of missile and drone activity in parts of the Gulf have raised concerns about how durable the ceasefire will be.
For India, a major importer of crude oil, the sharp fall in prices offers potential relief on inflation and currency pressures. However, traders remain wary, as any renewed disruption in the Strait of Hormuz could quickly reverse the gains and trigger fresh volatility in global markets.
(With inputs from IANS)
