Oil Tumbles, Stocks Jump After US-Iran Ceasefire

Global oil prices plunged and stock markets rallied on Wednesday after the United States and Iran agreed to a two-week ceasefire, easing fears of a wider energy and economic crisis.

The breakthrough came after Washington and Tehran moved to de-escalate tensions over the Strait of Hormuz, a critical waterway through which around one-fifth of the world’s oil and gas supplies pass.

US President Donald Trump announced a temporary halt to attacks just ahead of his deadline for Iran to reopen the strait or face massive retaliation. He said the move followed the receipt of a “workable” 10-point proposal and described the arrangement as a “double-sided ceasefire”.

Iran later confirmed it would allow safe passage through the Strait of Hormuz, helping calm fears of prolonged disruption to global energy supplies after more than five weeks of conflict.

The announcement triggered a sharp market reaction. West Texas Intermediate crude fell nearly 20 percent, while Brent crude dropped as much as 16 percent, as traders responded to the reduced risk of a supply shock.

Stock markets across Asia surged on hopes that the crisis, which has rattled the global economy for weeks, may now begin to ease. Tokyo and Seoul jumped more than five percent, while Taipei gained nearly four percent. Sydney and Hong Kong also posted strong gains, with Shanghai, Singapore and Wellington trading higher.

Currency markets also reflected renewed investor confidence. The US dollar weakened after gaining during the conflict as a safe-haven asset, while the yen, euro and pound all strengthened.

Gold rose around five percent, while Bitcoin also moved higher as investors reassessed inflation and interest rate expectations following the sudden easing of geopolitical tensions.

Earlier, Trump had issued stark warnings that Iran would face devastating consequences if the Strait of Hormuz remained closed. Tehran, in turn, had threatened to cut off oil and gas supplies to the United States and its allies for years if its “red lines” were crossed.

But with the deadline approaching, Trump said he would suspend attacks for two weeks if Iran agreed to the “complete, immediate and safe” reopening of the strait.

Pakistan Prime Minister Shehbaz Sharif, whose government played a key mediating role, said the ceasefire would begin immediately. He also suggested the agreement could help reduce hostilities in other parts of the region, including Lebanon.

Analysts said the deal is especially important for Asia, where many economies are highly vulnerable to rising fuel costs and imported energy shocks.

Market experts said the ceasefire has eased immediate pressure on inflation and bond yields, allowing investors to return to riskier assets after weeks of uncertainty.

While traders welcomed the move, analysts cautioned that markets remain sensitive to any signs the fragile ceasefire could collapse.