New York. Oil prices fell sharply below the $100 per barrel mark on Wednesday April 8, 2026 after the US announced a temporary ceasefire with Iran, easing fears of prolonged disruption to global energy supplies and maritime trade.
According to Reuters, Brent crude futures dropped by $15.78, or 14.4 percent, to $93.49 a barrel by 1024 GMT. United States West Texas Intermediate futures fell by $18.90, or 16.7 percent, to $94.05 a barrel.
Benchmark European diesel prices also declined significantly, shedding $311, or 20.4 percent, to $1,216.75 per metric tonne.
The sharp fall followed an announcement by US President Donald Trump that Washington had agreed to a two-week ceasefire with Iran.
The agreement is conditional upon the immediate and safe reopening of the Strait of Hormuz, a vital maritime corridor through which about one-fifth of the world’s oil supply passes each day.
According to Reuters, the deal was reached shortly before a deadline imposed by Washington that had threatened extensive strikes against Iranian civilian infrastructure if shipping lanes remained blocked.
The ceasefire represents a dramatic shift from escalating rhetoric that had unsettled markets in recent weeks.
Earlier statements by the US administration had warned of severe military action if Iran failed to restore passage through the strategic waterway.
According to Reuters, Iran responded by stating that it would halt its attacks provided strikes against its territory ceased, while also guaranteeing safe transit through the Strait of Hormuz for a period of two weeks in coordination with Iranian armed forces.
Global markets reacted swiftly to the development. According to Reuters, the recent conflict involving the US, Israel and Iran had triggered the steepest monthly oil price rise in history, with prices surging by more than 50 percent.
Analysts said the reopening of shipping routes would allow trapped crude supplies to gradually reach global markets, thereby easing pressure on fuel prices and refining operations.
The Strait of Hormuz remains a focal point of global energy security due to its narrow geography and strategic importance.
According to Reuters, approximately 130 million barrels of crude oil and 46 million barrels of refined fuel had been stranded on nearly 200 tankers in the Gulf as a result of the conflict and subsequent shipping disruptions.
Energy analysts said that although the ceasefire offered temporary relief, uncertainty remained over the durability of the arrangement.
Tamas Varga, an analyst at brokerage PVM Oil, said that the 10 to 13 million barrels per day of crude oil and petroleum products previously stranded behind the Strait of Hormuz could now begin to flow gradually into global supply chains.
He noted that the restoration of pre-conflict supply conditions would depend largely on whether the temporary truce could be transformed into a permanent settlement.
Shipping companies and refiners remained cautious despite the announcement.
According to Reuters, several maritime operators continued to seek clarity on logistical arrangements and security guarantees before fully resuming operations in the region.
Some firms have already rerouted cargo through alternative regional networks during the height of the crisis, reflecting ongoing concerns about the safety of vessels navigating the Gulf.
The ceasefire has also drawn international diplomatic attention.
According to Reuters, more than 15 countries are coordinating efforts to facilitate the safe resumption of maritime traffic through the Strait of Hormuz.
Despite optimism in financial markets, analysts warned that geopolitical risks could persist even if the current truce holds.
Saul Kavonic, an analyst at MST Marquee, said that Iran may continue to use the Strait of Hormuz as leverage in future disputes, which could lead markets to maintain a risk premium on oil prices.
This would likely sustain elevated price volatility across energy markets.
Economic observers also noted broader global consequences from the crisis.
According to Reuters, the conflict has already disrupted supply chains, affected shipping schedules and increased operational costs for energy-dependent industries worldwide.
Commonwealth Bank analyst Vivek Dhar said in a research note that a significant geopolitical premium may remain embedded in oil markets for the foreseeable future, depending on the outcome of ongoing negotiations.
He added that the ceasefire represented a promising development but remained subject to multiple uncertainties.
President Trump said the US had received a 10-point proposal from Iran, which he described as a workable basis for negotiation.
He indicated that discussions were progressing towards a more comprehensive agreement aimed at achieving long-term peace.
Market analysts echoed cautious optimism.
Tony Sycamore, an analyst at IG, said the agreement represented a constructive initial step that could lead to the reopening of shipping routes on a more permanent basis.
However, he emphasised that many uncertainties remained, particularly regarding enforcement mechanisms and compliance by both sides.
Energy markets are expected to remain sensitive to developments in the coming days as diplomatic negotiations continue.
Industry experts said sustained stability in oil prices would depend on the successful implementation of the ceasefire and the uninterrupted reopening of one of the world’s most critical energy corridors.
