Brent crude fell by about 13 per cent to US$94.80 per barrel, while US-traded oil dropped by more than 15 per cent to US$95.75. Prices remain above pre-conflict levels of around US$70 per barrel before 28 February.

Energy markets had been under pressure after disruptions to oil and gas flows from the Middle East, following threats to shipping routes. Some tanker movements have resumed, although traffic remains below normal levels.

U.S. President Donald Trump stated, “I agree to suspend the bombing and attack of Iran for a period of two weeks… subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz”. He had previously set a deadline of 20:00 EDT on Tuesday for an agreement.

Iranian Foreign Minister Abbas Araghchi said a ceasefire would be accepted “if attacks against Iran are halted”, adding that safe passage through the Strait of Hormuz “will be possible”.

Market analysts indicate that lower oil prices may ease cost pressure in the short term, although supply conditions remain uncertain. Damage to infrastructure across the region may delay a full recovery in production, with estimates indicating that repairs could take years and cost more than US$25 billion.

Disruptions earlier in the conflict reduced export capacity in parts of the region, including a 17 per cent reduction at Qatar’s Ras Laffan industrial hub, with repairs expected to take up to five years.

Asian markets have responded to the ceasefire developments, with stock indices rising across the region. At the same time, energy supply challenges have affected countries reliant on Middle East imports, including fuel shortages and higher transport costs.

While the ceasefire provides a temporary framework for reopening trade routes, energy supply and pricing are expected to remain sensitive to further developments.

Source: BBC