Washington: Oil prices plunged after US President Donald Trump announced a two-week pause on planned military strikes against Iran, contingent on Tehran reopening the Strait of Hormuz.
US crude futures dropped below $100 a barrel, erasing recent gains fueled by weeks of tensions over the vital Gulf chokepoint, through which about 20% of global oil flows, The Wall Street Journal reported Tuesday (US time).
Trump's Truth Social post signaled the suspension, easing fears of escalation and sparking a market rally. US stock futures climbed over 2%, Asian indexes like Japan's Nikkei and South Korea's Kospi advanced, and gold edged higher amid lingering uncertainty.
Markets had braced for Trump's deadline, with traders fearing a strait closure could spike prices by disrupting crude and LNG shipments. Iran had restricted passage for weeks, driving volatility.
Investors viewed prior threats as negotiation ploys, noting Trump's history of deadline extensions. Yet analysts warn the truce is fragile—reports of Gulf missile and drone activity persist, per The New York Times.
The standoff has rattled energy markets for weeks. For oil-import-dependent India, prolonged volatility threatens inflation, rupee stability, and growth.
(Inputs from IANS)