Oil prices recorded a sharp decline, falling below the $94 level, as the decision for a temporary ceasefire between the US and Iran significantly shifted sentiment in energy markets.

US crude WTI futures fell more than 18% on Wednesday, dropping to $92.3 per barrel. Brent also declined by 16% to $91.5 per barrel.

Ceasefire pushes oil prices below $95, with Brent moving toward $90

US President Donald Trump described the agreement as a “two-way ceasefire,” contingent on Iran reopening the Strait of Hormuz — one of the world’s most important energy transit routes.

He also revealed that Washington has received a 10-point proposal from Tehran, which he described as a “working basis for negotiations.”

The two-week ceasefire is seen as a critical “window” for finalising and implementing a broader agreement that could end the escalation.

For its part, Iran has agreed to reopen the Strait for the same period, on the condition of a full halt to attacks, stating that transit will be coordinated with its armed forces.

The near-complete closure of the Strait of Hormuz in recent weeks — through which around 20% of global oil supply passes — had caused significant disruption in markets.

Concerns over supply disruptions had increased fears of rising inflation and a slowdown in the global economy.

The temporary de-escalation appears to be reversing, at least in the short term, this trend, with investors reassessing the risk of a prolonged energy crisis.