Oil prices experienced a significant decline on Wednesday, following a tentative two-week ceasefire agreement between the U.S. and Iran. This deal aims to ensure safe passage through the critical Strait of Hormuz, although it has yet to translate into a notable increase in tanker traffic. By 1:11 p.m. ET, U.S. West Texas Intermediate (WTI) futures for May delivery plummeted by over 16%, settling at $94.62 per barrel. Meanwhile, international benchmark Brent crude futures for June delivery dropped 13.8% to reach $94.16 per barrel. If WTI closes more than 14.52% lower, it could mark its worst daily performance since April 27, 2020.
President Donald Trump characterized the ceasefire as conditional on Iran’s commitment to reopen the Strait of Hormuz fully and safely. He stated that the U.S. had received a workable 10-point proposal from Tehran for negotiations. “Almost all of the various points of past contention have been agreed to between the United States and Iran,” Trump noted on social media, adding that the two-week period would provide ample time to finalize the Agreement. Iranian Foreign Minister Seyed Abbas Araghchi assured that Tehran would allow safe passage in coordination with its armed forces, providing “due consideration to technical limitations.” He added, “If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations.”
Despite hopes for a smooth transition, the agreement began to show signs of strain shortly after its announcement. This ceasefire emerged just two hours before Trump’s deadline for Iran to reopen the strait, which was met with threats to bomb Iranian infrastructure if not adhered to. Early on Wednesday, Trump reiterated that the U.S. would assist with traffic flow in the Strait during the ceasefire.
However, oil tanker traffic remains severely limited. According to Iranian state news agency Fars, shipping through the Strait has been largely suspended as Israeli strikes continue in Lebanon. Data from Kpler illustrates that ship traffic has not surged beyond a few vessels that have managed to navigate the route amidst ongoing hostilities. Analyst Matt Smith from Kpler speculated that the flow of vessels might remain limited to about 10-15 per day while Iran continues to vet those wishing to transit.
Complicating matters further, Tehran reportedly plans to require ship owners to pay transit tolls in cryptocurrency, as detailed by The Financial Times. Maritime risk analyst Tomer Raanan remarked, “I don’t think we’re going to see a normalization within these two weeks.” He suggested that while ship owners with vessels stranded in the Persian Gulf will seek to depart, they may hesitate to return due to the persistent threat of attacks on oil infrastructure and ongoing production cuts.
The ongoing conflict has drastically affected oil exports through the Strait, which previously accounted for about 20% of global oil supplies before hostilities escalated on February 28. Current disruptions have triggered what could be the largest supply chain crisis in history, pushing prices for crude oil, jet fuel, diesel, and gasoline sharply upwards. Industry leaders have warned that persistent issues in the Strait could lead to fuel shortages worldwide. As tensions remain, the developments in the Strait of Hormuz continue to be closely monitored by global markets and experts alike.
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Original Source: https://www.cnbc.com/2026/04/07/oil-prices-iran-war-trump-deadline-strait-hormuz.html
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Publish Date: 2026-04-08 23:03:00
