The United States and Iran have agreed to a two-week ceasefire, with both sides claiming victory in the more than month-long conflict that has roiled global financial markets and sent oil prices skyrocketing. According to a statement from the US Department of State, the ceasefire will allow for the temporary reopening of the vital Strait of Hormuz, a gateway for one-fifth of the world’s oil.
President Donald Trump told AFP that the deal was a ‘total and complete victory’ for the US, while Iran cast the ceasefire as a win and said it had agreed to talks with Washington to begin Friday in Pakistan on a path to end the conflict. The Iranian Supreme National Security Council said in a statement that ‘the enemy has suffered an undeniable, historic and crushing defeat in its cowardly, illegal and criminal war against the Iranian nation’.
Ceasefire Terms
The White House said Israel had also agreed to the ceasefire, but Prime Minister Benjamin Netanyahu said it does not include Lebanon, where Israeli assaults in response to rocket fire by Iranian-backed Hezbollah have led to more than 1,500 deaths, according to Lebanese authorities. Trump said he had spoken to Pakistan’s leaders who ‘requested that I hold off the destructive force being sent tonight to Iran’.
Pakistan’s Prime Minister Shehbaz Sharif said on April 8 that the United States, Iran and their allies had agreed to a ceasefire ‘everywhere’, including Lebanon, following mediation by his government to stop weeks of fighting. He later told AFP he believed China had helped get Tehran to negotiate.
Impact on Oil Prices
Oil prices plunged by more than 17 percent after the ceasefire announcement. Costs at the pump had risen sharply since the war across the globe and for ordinary Americans, putting heavy political pressure on Trump. The following are some key points to note about the ceasefire and its impact on oil prices:
- Oil prices dropped by 17% after the ceasefire announcement
- The ceasefire will allow for the temporary reopening of the Strait of Hormuz
- Stock prices soared in early trade Wednesday in Asia
Trump said that the United States was ‘very far along’ in negotiating a lasting peace deal with Iran, but details of the agreement are still scarce. As the situation continues to unfold, one thing is certain – the ceasefire will have a significant impact on global oil prices and the economy as a whole.
