U.S. West Texas Intermediate crude fell by nearly $20 per barrel on Wednesday after U.S. President Donald Trump said he had agreed to a two-week ceasefire with Iran that was subject to the immediate and safe reopening of the Strait of Hormuz.
WTI crude for May delivery fell $18.10, or 16.02%, to $94.85 per barrel as of 2320 GMT, after hitting $91.05, the lowest since March 26.
The announcement came shortly before his deadline for Iran to open the Strait of Hormuz, where 20% of the world’s oil transits, or face widespread attacks on its civilian infrastructure.
The announcement was made on social media, where he had previously said on Tuesday “a whole civilization will die tonight” if his demands were not met.
Iran said it would halt its attacks if attacks against it stopped and that safe transit through the Strait of Hormuz would be possible for two weeks in coordination with Iranian armed forces, according to a statement by Foreign Minister Abbas Araqchi on Wednesday.
The U.S.-Israeli war with Iran saw the steepest monthly oil price rise in history in March of more than 50%.
Trump said the U.S. had received a 10-point proposal from Iran which he called a workable basis to negotiate and said the parties were very far along on reaching a definitive agreement for long-term peace. “It’s a good start and could pave the way to a more permanent reopening – but lots of ifs still to work out,” IG analyst Tony Sycamore wrote in a note.
(Reporting by Helen Clark; Editing by Chris Reese and Jamie Freed)