U.S.-Iran Ceasefire Drops Oil Prices as Shippers Seek Hormuz Clarity

The U.S. and Iran have agreed to a two-week ceasefire, sending oil prices plummeting and stocks soaring as shippers seek clarity on reopening the Strait of Hormuz.

Oil prices dropped significantly following President Donald Trump's announcement of the ceasefire, with U.S. crude futures falling around 16% to $94.59 a barrel and Brent futures sliding 15% to $92.35 per barrel. The Dow Jones Industrial Average surged more than 1,000 points in early morning trade, while the Standard & Poor’s 500 leaped between 2.1% and 2.8%. Global assets staged a sharp rally, with equity indexes in Asian and European markets climbing between 4% and 5%, according to Reuters.

As of Tuesday, ship tracker Kpler reported that approximately 187 laden tankers carrying 172 million barrels of crude oil and refined products were still trapped inside the Strait of Hormuz. With more than 1,000 ocean-going vessels held up in the Gulf, clearing the backlog would likely take over two weeks even under normal conditions. Shippers have expressed the need for more clarity on the terms of the ceasefire before resuming transit through the strait.

Iran's foreign minister, Abbas Araqchi, confirmed that Tehran would provide safe passage if attacks against it ceased, coordinating with its armed forces and considering technical limitations. However, Iran’s coastguards warned that any ship attempting to sail without permissions would be 'targeted and destroyed,' as reported by Reuters. The first vessel had transited the Strait of Hormuz with Iran's permission following the ceasefire, according to Iranian state TV.

The six-week conflict has sent oil prices soaring, reignited inflation fears, and thrown the global rates outlook into disarray. While the ceasefire deal is seen as a temporary relief, analysts warn of likely twists and turns ahead. Investors remain cautious about taking new risks until there is evidence of lasting peace.