Oil Prices Fall Below $90 After Trump Announces Iran War Has Ended
Oil prices fell below $90 a barrel after President Donald Trump announced that the United States had reached a framework agreement with Iran ending the war, while the World Bank warned the conflict has slowed global economic growth to its weakest pace since the Covid-19 pandemic.
Oil Prices Tumble Below $90
Oil prices tumbled below the $90 per barrel mark on hopes of a deal to restore global crude flows after signs of easing tensions in the Middle East. [1] Around 7 am IST, WTI Crude stood at 86.73, down 0.98 or 1.12 percent, while Brent Crude was at 89.45, down 0.93 or 1.03 percent. [1] These declines followed President Donald Trump’s statements that a framework agreement had been reached with Iran. [1] Market participants responded to expectations that global crude flows would resume once the agreement is finalized. [1] The price movements occurred after earlier periods when prices had remained above the $100 per barrel mark compared with pre-conflict levels of $70 per barrel. [1] U.S. stocks also rallied on the same day, contributing to broader market sentiment that supported the drop in oil. [4]
Trump Declares End to Iran War
President Donald Trump stated during a tele-rally in support of Georgia lieutenant governor Burt Jones that Washington had reached a framework agreement with Iran and that the war has ended. [1] He declared, “I don’t know if you heard, but we ended the war with Iran today.” [1] Trump further said that he expects an agreement to be signed over the next few days. [1] He also indicated that the Strait of Hormuz would reopen once a deal is finalized. [1] Trump, who had earlier threatened to hit Iran very hard, called off planned strikes on Thursday after discussions with Iran progressed. [1] Iran’s semi-official Fars news agency reported that Tehran had not approved the text of any agreement. [1] These developments came after the president’s decision to de-escalate contributed to the rally in U.S. stocks. [4]
World Bank Warns of Slowed Global Growth
The world economy is weakening as energy prices fuel a new bout of inflation. [2] The war in the Middle East is slowing global economic growth this year to its weakest pace since the Covid-19 pandemic, according to a World Bank report published Thursday. [2] The report revealed the fallout of soaring energy prices that have resulted from the conflict. [2] The war has tangled supply chains and caused oil, gas and fertiliser prices to gyrate for months. [2] These fluctuations have fueled inflation that is weakening the world economy overall. [2] The World Bank assessment ties directly to the ongoing disruptions in energy markets that began with the conflict. [2]
Strait of Hormuz Disruptions
On Wednesday, Iran announced the closure of the Strait of Hormuz, warning that any vessel attempting to pass through would come under fire. [1] Tehran’s months-long blockade of the strait, which normally carries a fifth of global oil and liquefied natural gas shipments, had kept oil prices elevated. [1] The US military said on social media that commercial ships continued to transit the waterway. [1] The conflict began on February 28 with joint US and Israeli strikes on Iran. [1] Iran’s tightening of its control over the Strait of Hormuz, a route carrying around 20 percent of the world’s fuel, has sent ripples across economies worldwide. [1] The Middle East crisis has continued to keep global crude markets on edge. [1]
US Stocks Surge on Easing Tensions
U.S. stocks rallied to their best day in two months after President Donald Trump called off his threat to bomb Iran in the evening. [4] The Dow jumped 930 points on the day. [4] This surge occurred alongside the drop in oil prices that followed the easing of tensions. [4] The market reaction reflected investor relief over the de-escalation moves announced by the president. [4] Oil prices fell at the same time, reinforcing the positive tone across asset classes. [4]
Trump's 10 Percent Global Tariff Remains
A U.S. appeals court on Thursday extended its block on a lower court ruling against the Trump administration's 10 percent global tariff under Section 122 of the Trade Act. [3] The extension keeps the tariffs in place for three importers that had won a reprieve from the duties last week. [3] This development occurred independently of the Iran-related announcements but added to the broader policy backdrop affecting markets. [3]
What to watch next: observers will monitor whether an agreement is signed over the next few days and whether the Strait of Hormuz reopens once finalized.
