Oil prices dropped sharply while Asian stock markets surged on Wednesday after the United States and Iran agreed to a two-week ceasefire, easing tensions in the region. The agreement includes the temporary reopening of the Strait of Hormuz, a key global oil transit route.
In early trading, US crude benchmark West Texas Intermediate fell 16.56 percent to $96.39 per barrel. Brent crude also declined 15.89 percent to $93.38 per barrel.
Asian equity markets responded positively to the development. Japan’s Nikkei 225 rose 4.38 percent to 55,771.56 points, while South Korea’s Kospi jumped 5.71 percent to 5,808.65.
Market analysts said easing fears of further escalation encouraged investors to return to equities, particularly in export-driven economies such as Japan and South Korea.
The ceasefire follows weeks of heightened tensions and conflict in the region. Iran confirmed it would allow safe passage for ships through the Strait of Hormuz for a limited two-week period.
Donald Trump said the United States would suspend military action during this period, provided shipping routes remain open and secure.
Iranian Foreign Minister Abbas Araghchi also confirmed the temporary reopening of the waterway, which handles nearly one-fifth of the world’s oil supply.
Talks between the two sides are expected to begin later this week, with the aim of reducing tensions and finding a longer-term solution.
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