Oil prices plunged below $100 per barrel during Wednesday's Asian trade after Donald Trump announced a two-week ceasefire with Iran, easing immediate concerns over disruptions to global energy supplies.
The agreement is contingent on the immediate and safe reopening of the Strait of Hormuz, a critical transit route for global oil shipments.
By 2:30 pm AEST (5:30 am GMT), Brent crude futures for June delivery had fallen $14.71, or 13.5%, to $94.56 per barrel. Meanwhile, West Texas Intermediate crude dropped $16.79, or 14.9%, to $96.16 per barrel.
Trump’s reversal came just ahead of his previously set deadline for Iran to reopen the Strait of Hormuz.
"This will be a double sided CEASEFIRE!" he wrote on social media, after earlier warning that "a whole civilization will die tonight" if his demands were not met.
Abbas Araghchi said Iran would halt its attacks if strikes against the country ceased, adding that safe transit through the Strait of Hormuz would be ensured for two weeks in coordination with Iranian armed forces.
Despite the ceasefire announcement, tensions remained elevated across the region, with several Gulf states reporting missile launches and drone activity or issuing warnings for civilians to seek shelter.
The conflict between the United States, Israel and Iran triggered a historic surge in oil prices in March, with crude recording its steepest monthly gain on record of more than 50%.
Trump also said Washington had received a 10-point proposal from Tehran, describing it as a workable basis for negotiations and noting that both sides were progressing toward a potential long-term peace agreement.
Iran's National Security Council said talks with Washington will begin in the Pakistani capital, Islamabad, on Friday, based on the 10-point proposal.
