Nigerian crude oil and major global benchmarks plunged below $95 a barrel on Wednesday following Iran’s agreement to temporarily reopen the Strait of Hormuz, a strategic waterway that handles roughly 20% of the world’s energy supply, in exchange for a two-week ceasefire with the United States.
Brent crude and West Texas Intermediate (WTI) also fell sharply, down by more than 15% at the time of publication, marking the steepest decline in months. Meanwhile, Bonny Light, Nigeria’s key crude grade, had previously surged by over 50% amid the Middle East tensions.
US and Iran Agree to Temporary Ceasefire
The announcement came shortly after US President Donald Trump revealed on social media that he had agreed to suspend military action against Iran for two weeks, provided Tehran allowed “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.” The temporary arrangement was facilitated by Pakistan, which has been mediating negotiations between the two sides.
Iranian Foreign Minister Abbas Araghchi confirmed that “safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces for a period of two weeks” and added that Iranian forces would halt defensive operations if attacks against the country were suspended.
Trump also acknowledged receipt of a 10-point proposal from Iran, which could form the basis for a full ceasefire. Both countries are scheduled to begin talks on the proposal in Islamabad on April 10. Iran’s main demand includes coordinated and controlled transit through the strait.
Regional Reactions and Diplomatic Pressure
A White House official confirmed that Israel had also agreed to the ceasefire, though reports from some Arab states indicated that Iranian attacks continued, raising questions over the timing of the truce.
Pakistan’s Prime Minister Shehbaz Sharif appealed to both sides to extend the ceasefire by an additional two weeks to allow diplomacy to run its course. He also urged Tehran to reopen the Strait of Hormuz for a corresponding period as a goodwill gesture and called for a comprehensive regional ceasefire.
The White House stated that Trump is aware of Pakistan’s proposal and a response is expected, raising hopes of a potential diplomatic pause.
Market Impact
The ceasefire announcement triggered a sharp decline in crude prices, with Brent crude falling to its lowest level in nearly six years prior to Trump’s formal announcement. Analysts said the agreement alleviates fears of prolonged disruption to energy flows through the Strait of Hormuz, which had driven recent price spikes.
Pakistan continues to play a key role in mediating indirect talks between Washington and Tehran, with the aim of ending the six-week Middle East conflict that has resulted in thousands of deaths and a global energy crisis.
The temporary truce is expected to ease tensions in the region and may provide short-term stability for the global oil market, although uncertainty remains until a more comprehensive agreement is reached.
