President Donald Trump announced a two-week suspension of attacks against Iran, conditioned on reopening the Strait of Hormuz. WTI crude prices fell over 17% to US$93 per barrel, while Brent dropped to US$103.43. The move follows a 10-point Iranian proposal and talks with Pakistan.
President Donald Trump announced on social media a two-week suspension of attacks against Iran. The truce is conditioned on Iran allowing the complete, immediate, and safe opening of the Strait of Hormuz, through which nearly 20% of world oil transits.
Trump stated he received a 10-point proposal from Iran, calling it a viable basis for negotiations. "Almost all points of discord have been agreed between the United States and Iran, but a two-week period will allow finalizing the agreement," the president affirmed. The announcement came less than two hours before the White House deadline for reopening the strait.
Previously, Trump had threatened strikes on key Iranian infrastructure and hardened his rhetoric, mentioning the possibility of destroying Iran's "entire civilization." On Tuesday morning, WTI hit an intraday high of US$117 per barrel. The decision followed talks with Pakistan's Prime Minister Shehbaz Sharif, who requested an extension.
The price drop affects Chile, which imports over 95% of its oil. Ignacio Mieres, head of research at XTB, said the truce reduced the geopolitical risk premium, easing fears of damage to infrastructure and a prolonged strait closure.
