Oil prices dropped below $100 per barrel (bbl) following an announcement from US President Donald Trump regarding a two-week ceasefire with Iran, contingent on the safe reopening of the Strait of Hormuz, reported Reuters.
By 06:30 GMT on 8 April, Brent futures had decreased by $16.32, reaching $92.95/bbl, while US West Texas Intermediate (WTI) fell by $18.16 to $94.79/bbl.
Before the announcement, President Trump set a deadline for Iran to reopen the strategically vital Strait of Hormuz, a transit route for roughly 20% of the world’s oil supply, and warned of major strikes on Iranian infrastructure if it did not comply.
According to a statement by Iranian Foreign Minister Abbas Araqchi, Iran would halt its attacks if retaliatory actions against it ceased.
The statement also noted that safe passage through the Strait of Hormuz would be facilitated for two weeks with coordination from Iranian armed forces.
Recent hostilities in the region, including missile launches and drone attacks, have prompted Gulf states to issue warnings.
The ongoing US-Israeli conflict with Iran led to a significant rise in oil prices, with March marking the highest, exceeding 50%.
Trump also revealed that the US had received a ten-point proposal from Iran, describing it as a potential basis for long-term peace negotiations.
Progress towards a definitive agreement is reportedly well under way.
In a related development, India is poised to receive its first shipment of Iranian oil in seven years after the US temporarily lifted sanctions on Iranian oil and refined products to alleviate supply shortages, according to ship tracking data from LSEG and Kpler, reported Reuters.
State-run Indian Oil purchased the cargo, currently aboard the Curacao-flagged very large crude carrier Jaya, which is en route to India's eastern coast and expected to arrive later this week.
Initially, the Jaya diverted to South East Asian waters for a discharge in China before proceeding to India.
As the world's third-largest importer and consumer of oil, India has not imported Iranian crude since May 2019 due to US pressure.
However, recent supply disruptions resulting from the US-Israeli conflict have significantly impacted the country.
