Prices of the two international oil benchmarks, Brent and the West Texas Intermediate (WTI), have plummeted after the Trump Administration announced a temporary ceasefire for the hostilities against the Iranian regime.

On Truth Social, Trump reported earlier that the two countries had “over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East,” leaving a previously announced ultimatum without effect for at least 5 days.

Brent oil futures, which reached a $114.43 session high, plummeted as low as $96 immediately after the announcement, as the market absorbed the news with anticipation of a de-escalation of the hostilities that might lead to the opening of the Strait of Hormuz.

WTI futures prices also behaved similarly, with futures reaching session lows of $84.37 after opening close to $101.

Nonetheless, prices stabilized after Iranian media claimed that Trump’s statements were false and that there were no talks. According to the Fars news agency, not even intermediaries were involved in these talks, and an unidentified source claimed that Trump had backed down after threats from the Iranian regime about targeting power plants in U.S.-allied countries.

Axios stressed that these talks were indeed taking place, including mediators from Turkey, Egypt, and Pakistan. “The mediation is ongoing and making progress. The discussion is about ending the war and resolving all outstanding issues. We hope to have answers soon,” said a source with knowledge of the matter.

The conflict, which has already entered its third week, is having a profound impact on oil and gas prices both internationally and in the U.S. A gallon of gas is now nearing the $4 mark, up from $2.98 on February 26, rising over 30% since the hostilities against Iran started.

FAQ 🛢️🛢️

• Why did global oil prices suddenly plummet? Both Brent and WTI benchmarks dropped sharply after the Trump Administration announced a temporary five-day ceasefire regarding hostilities with Iran.
• How low did oil prices fall following the announcement? Anticipation of a de-escalation drove Brent crude down to $96 and WTI futures down to $84.37.
• Why did the oil market quickly reverse its downward trend? Prices stabilized after Iranian media explicitly denied that any peace talks or mediation were taking place.
• How is this Middle East conflict affecting U.S. consumers? The ongoing hostilities have driven domestic gas prices up over 30% in under a month, pushing the average near $4 per gallon.

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