Oil prices have dropped below $100 per barrel on Wednesday, April 8, after U.S. President Donald Trump announced that he had agreed to a two-week ceasefire with Iran.
The agreement depends on Iran immediately and safely reopening the Strait of Hormuz.
Brent crude fell by $14.84 (13.6%) to $94.43 per barrel, while WTI crude dropped $16.13 (14.3%) to $96.82 per barrel as of 00:23 GMT.
This shift in stance came just before Trump’s deadline for Iran to reopen the Strait of Hormuz, a critical route through which about 20% of the world’s oil supply passes, or risk facing large-scale attacks on its civilian infrastructure.
“This will be a double-sided ceasefire!” he wrote on social media, after posting earlier on Tuesday that “a whole civilisation will die tonight” if his demands were not met.
According to Reuters, Iran said it would stop its attacks if attacks against it also stopped.
It added that ships could pass safely through the Strait of Hormuz for two weeks, provided they coordinate with Iranian armed forces, Foreign Minister Abbas Araqchi said on Wednesday.
However, multiple Gulf states have identified missile launches and drone attacks or issued warnings to civilians to take shelter.
“Even with a peace deal, Iran may be emboldened to threaten the Strait of Hormuz more frequently in the future, and the market will price in heightened risk to the Strait of Hormuz going forward,” an analyst has said.
The U.S.-Israeli war with Iran saw the steepest monthly oil price rise in history in March of more than 50%.
Trump said the U.S. had received a 10-point proposal from Iran, which he called a workable basis to negotiate, and said the parties were very far along on reaching a definitive agreement for long-term peace.
“It’s a good start and could pave the way to a more permanent reopening – but lots of ifs still to work out,” IG analyst Tony Sycamore said.
WTI has maintained its price premium over Brent, reversing typical price patterns, due to its May delivery contract, while Brent is for June, reflecting that barrels with an earlier delivery date are commanding a higher price.
While global oil prices have now dropped below $100 per barrel following the U.S.-Iran ceasefire announcement, the recent fuel price hikes in Ghana are a direct result of earlier market shocks, and consumers are still feeling the consequences.
The sharp rise in crude prices in March, driven by the U.S.-Israeli conflict with Iran, saw oil surge by more than 50% in a single month.
Those increases have already fed into Ghana’s fuel pricing cycle, which typically adjusts with a delay.
This means pump prices reflect past global spikes, not the latest declines.
