Middle East: Oil falls back below $100 after temporary ceasefire

Oil prices fell by more than 15% on Wednesday, dropping back below $100 after U.S. President Donald Trump announced the postponement of his ultimatum against Iran and a temporary ceasefire, providing clear relief to markets, particularly in Asia where stock exchanges moved higher.

At around 00:15 GMT, a barrel of West Texas Intermediate (WTI), the U.S. crude benchmark, plunged by 15.40% to $95.55, while North Sea Brent, the global benchmark, dropped by 15.03% to $92.85.

“Following discussions with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir of Pakistan, during which they asked me to suspend the military intervention planned for tonight against Iran, and provided that the Islamic Republic of Iran agrees to the full, immediate, and secure opening of the Strait of Hormuz, I agree to suspend the bombings and attacks against Iran for a period of two weeks,” the U.S. president wrote on his Truth Social platform.

The occupant of the White House stated that this would be a “reciprocal ceasefire,” explaining that “the reason is that we have already achieved and exceeded all military objectives, and that we are very advanced in concluding a final agreement concerning long-term peace with Iran and peace in the Middle East.”

In the wake of this easing of tensions, Asian markets rose sharply. In Tokyo, the Nikkei 225 index gained nearly 4% to 55,842 points, while in Seoul, the Kospi surged by 5.94% to 5,821 points after briefly surpassing 6%.

Gold rebounded after being weighed down in recent weeks by inflation expectations and anticipated interest rate hikes. At around 00:20 GMT, the precious metal was up 2.30% at $4,815 per ounce.

On the foreign exchange market, the dollar declined significantly against the euro and the yen, following the drop in oil prices. It notably fell by 0.63% against the Japanese currency, to 158.62 yen per dollar.