Brent crude fell dramatically to $95.068 per barrel (from $109.77) on Wednesday, as US President Donald Trump declared a two-week delay in strikes on Iran. US West Texas Intermediate (WTI) crude plunged by roughly $20 per barrel following the announcement.
The suspension is connected to the prompt reopening of the Strait of Hormuz, a tiny waterway that transports almost one-fifth of the world's oil and gas each day.
Within minutes, markets reacted, with oil falling, Treasuries rising, and US equities surging. Investors regard the ceasefire as a hint that oil supplies may resume normal flow following weeks of disruption.

Why Oil Has Surged
The US-Israeli attacks on Iran (starting February 28) have forced Tehran to virtually close the Strait. Tankers avoided this route. Insurance premiums increased. Supply concerns sent oil prices up more than 50% in March, the largest monthly increase on record.
High oil prices had stoked global inflation fears. Governments and businesses were scurrying to respond to the energy shock.
On Wednesday, Trump stated that a long-term peace accord with Iran was "in progress" and that Iran's 10-point proposal appeared feasible. Iran, for its part, stated that if attacks were stopped, safe passage through the Strait would be guaranteed for two weeks. The disclosures were sufficient for traders to unwind panic positions.Why the Strait of Hormuz is so important.
The Strait of Hormuz is more than just a shipping route. It is the primary route for oil from Saudi Arabia, the UAE, Kuwait, Iraq, and Iran. Any disturbance here has a quick impact on global prices.
Even the prospect of closure is enough to sway markets. With the reopening of the Strait, traders anticipate that tanker traffic will restart. This decreases the immediate supply risk.
Uncertainty remains
It is vital to note that the truce is just for two weeks and is contingent on coordination with Iranian armed forces. A long-term deal is still being negotiated.
Analysts believe the relief will be temporary if talks fail. For the time being, however, investors believe that the worst of the oil shock may have passed.