Ceasefire! Oil Plunges 20%, Stocks Soar as US and Iran Agree to Two-Week Truce

Oil prices plunged Wednesday while stocks soared after the United States and Iran agreed to a two-week ceasefire that will see Tehran temporarily reopen the vital Strait of Hormuz.

The news pushed down crude prices:

• West Texas Intermediate: Lost almost 20%

• Brent: Lost as much as 16%

Markets Rally

The euphoria sent global equities rocketing:

• Seoul: Jumped 6.9%

• Tokyo: Jumped 5.4%

• Taipei: Added more than 4%

• Mumbai: Added 3.8%

• Dubai: Jumped 8.5% (biggest intraday increase since December 2014)

Whose Victory?

Both the US and Iran claimed victory.

Trump told AFP the deal was a “total and complete victory” for the US.

Iran’s Supreme National Security Council said: “The enemy has suffered an undeniable, historic and crushing defeat… Iran achieved a great victory.”

The Deal

Trump wrote on Truth Social: “Subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.”

Iranian Foreign Minister Abbas Araghchi confirmed safe passage for two weeks for ships through the Strait.

“If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations,” Araghchi said.

The Uranium Question

Trump said the United States was “very far along” in negotiating a long-term agreement with Iran, which had submitted a 10-point plan that he said was “workable.”

He insisted that Iran’s nuclear material would be “perfectly taken care of” in any peace deal.

Before the Deadline

The United States and Israel struck key infrastructure before Trump’s deadline, with Netanyahu saying attacks hit railways and bridges allegedly used by the Revolutionary Guards.

The Israeli military also offered a rare statement of regret after it acknowledged damaging a synagogue in Tehran.

Mixed Reactions

US lawmakers are divided.

Democratic congresswoman Alexandria Ocasio-Cortez said Trump’s ceasefire announcement “changes nothing.”

Republican senator Lindsey Graham said congressional oversight is needed to “kick the tires.”

China said it “welcomes” the ceasefire.

The Bottom Line

The bombs have stoppedfor two weeks. The Strait of Hormuz is reopening. Oil prices are crashing. Stocks are soaring.

Both sides claim victory. The world breathes a sigh of relief.

But the ceasefire is temporary. The long-term deal is not done. And the war could resume.