Following the announcement of a two-week ceasefire in the US-Iran conflict, crude oil prices have dropped by 15%. On Wednesday, prices fell by approximately $15, settling at $94.27 per barrel.

According to reports, this marks the largest single-day decline in nearly six years. Just a day earlier, the price of crude oil stood at $109.27 per barrel. Prior to the outbreak of hostilities on February 28, crude oil was trading at $73 per barrel.

During the conflict, prices had surged to a peak of $120 per barrel. Consequently, there had been apprehensions regarding a potential hike in petrol and diesel rates. According to experts, however, these fears have now been allayed due to the decline in oil prices.

Strait of Hormuz Expected to Reopen Following Ceasefire

The 40-day-long conflict between the US and Iran has been paused for a two-week ceasefire. Both nations agreed to the truce following mediation efforts by Pakistan and China. Under the terms of the agreement, the US, Israel, and Iran will cease all offensive operations. With the assistance of the Iranian military, the safe passage of vessels through the Strait of Hormuz is to be ensured.

The US President had previously issued a stern warning threatening to devastate Iran. He had stated that ‘if access through the Strait of Hormuz were denied, he would wipe out the entirety of Iranian civilization.’

Global Markets Rally, Dollar Weakens Following Ceasefire

News of the cessation of hostilities has triggered a rally across global stock markets. US S&P 500 futures climbed by 2%, while European markets surged by up to 5%. India’s benchmark indices—the Sensex and Nifty—also rose by approximately 4%. Bolstered by renewed investor confidence, the Indian Rupee has strengthened against the US Dollar.

According to the RBI, during early trading on Wednesday, the Rupee strengthened by 41 paise against the US Dollar, reaching a level of 92.55. It had closed at 92.96 the previous day.