Oil futures cratered on Tuesday night after President Trump suspended a wide-ranging bombing campaign on Iran and announced a two-week ceasefire in the US-Iran war.
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump wrote in a post to Truth Social. Tuesday evening, roughly an hour and a half ahead of his 8 p.m. ET deadline, “This will be a double sided CEASEFIRE! The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East.”
Futures on Brent crude (BZ=F), the international benchmark, dropped over 16% to trade as low as $90.78 a barrel. Futures on the US benchmark, West Texas Intermediate (WTI) crude (CL=F), also fell 16% to trade just above $94.
Stocks also soared on the news, with futures on the S&P 500 (ES=F) and the tech-heavy Nasdaq 100 (NQ=F) jumping around 2%, while contracts on the Dow Jones Industrial Average (YM=F) skyrocketed more than 900 points.
While the two-week ceasefire is underway, the Strait of Hormuz, through which 20% of the world’s oil supply passes, remains a point of contention.
“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz,” Trump wrote.
He added that the US received a “10 point proposal from Iran, and believe it is a workable basis on which to negotiate” bringing this long-term problem “close to resolution.”
This comes after President Trump’s post to Truth Social Tuesday morning, where he wrote, “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.”
The President also wrote, in what some took as an opening for potential negotiations preempting the strikes, “Now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily wonderful can happen, WHO KNOWS?”
Prior to this evening, Iran’s leadership on Tuesday took itself out of negotiation talks and was unwilling to discuss a temporary ceasefire, The New York Times reported, looking only for a full end to the war and the payment of reparations for damages, among other conditions.
