WTI nosedives below $90 as Iran reopens Hormuz for two weeks

West Texas Intermediate (WTI), futures on NYMEX, slide over 11% below $90.00 on Wednesday, as Iran has agreed to reopen the Strait of Hormuz, a critical passage to 20% of global energy supply, for two weeks in return for a temporary ceasefire with the United States (US).

Oil prices gained over 50% since the war started in the Middle East involving the US, Israel, and Iran on February 28.

Earlier in the day, US President Donald Trump announced through a post on Truth.Social, that he has suspended planned attacks on Iranian power plants and bridges, as Tehran has agreed to complete, immediate, and safe opening of the Strait of Hormuz”. Trump also acknowledged that Washington has received a 10-point proposal from Iran, which can be negotiated for a complete ceasefire.

According to Iranian officials, both Tehran and Washington will begin negotiations on the 10-point proposal from April 10 in Islamabad. Key demands proposed by Iran are controlled transit through the Hormuz coordinated with Iranian armed forces, ending the war against Iran and allied groups, the withdrawal of US combat forces from all regional bases, lifting all primary and secondary sanctions, payment of full compensation to Iran, and the release of all frozen Iranian assets.

Lower oil prices are expected to ease inflation expectations globally, a scenario that would prompt traders to pare bets supporting interest rate hikes by major central banks in the near term.