Oil Prices Slide Markets Rally as US–Iran Ceasefire Reopens Key Shipping Route

By Blessing Nweke

Global oil prices plunged and stock markets surged on Wednesday after the United States and Iran agreed to a conditional two-week ceasefire that includes reopening the critical Strait of Hormuz.

Benchmark Brent crude dropped about 13% to $94.80 per barrel, while US-traded oil fell more than 15% to $95.75. Despite the sharp decline, prices remain significantly above pre-conflict levels of around $70 a barrel before tensions escalated on 28 February.

Energy markets had been rattled by weeks of disruption after Iran threatened to target vessels passing through the strait in response to US and Israeli airstrikes. The waterway is a vital artery for global oil and gas shipments, and any disruption has immediate worldwide consequences.

Equity markets reacted positively to the easing tensions. Japan’s Nikkei 225 rose 5%, South Korea’s Kospi gained nearly 6%, Hong Kong’s Hang Seng climbed 2.8%, and Australia’s ASX 200 added 2.7%. US stock futures also pointed to a stronger opening on Wall Street.

Donald Trump said he would suspend military action for two weeks, contingent on Iran guaranteeing safe and immediate passage through the strait. Iran’s Foreign Minister Abbas Araghchi signaled Tehran’s willingness to comply if attacks cease.

Analysts caution that while the ceasefire has calmed markets, uncertainty remains. Damage to regional energy infrastructure could take months—or even years—to repair, with costs estimated above $25 billion.

Asian economies, heavily dependent on Middle Eastern energy supplies, have been among the hardest hit. Experts say sustained peace will be crucial for stabilizing prices and restoring supply chains in the months ahead.