Oil drops 15% as Trump–Iran ceasefire opens Hormuz for two weeks
A 14-day truce and a 10-point proposal from Tehran triggered a sharp selloff in crude and a broad equity rally, but the window is conditional and short. Markets are betting on a quick return of flows through the Strait of Hormuz, yet questions remain about how much traffic can actually move and whether the truce will hold.
Apr 7, 2026, 7:52 PM EDT
Why it matters: A two-week truce and a tentative deal to reopen the Strait of Hormuz could ease energy supply shocks and inflation pressures, while boosting risk assets. But the window is narrow and conditional, so the market’s relief may be short-lived if traffic doesn’t resume.
Driving the news:
- President Donald Trump agreed to a two-week ceasefire with Iran after receiving a 10-point proposal from Tehran, contingent on a complete, immediate, and safe opening of the Strait of Hormuz.
- Iran’s foreign minister said ships can transit the strait during the truce via coordination with Iran’s Armed Forces and “due consideration to technical limitations”.
- The ceasefire came less than two hours before Trump’s 8 p.m. ET deadline to strike Iranian bridges and power plants if the strait remained closed.
By the numbers:
- U.S. crude futures fell more than 15% to under $95 a barrel; Brent dropped 12.88% to $95.12.
- WTI fell more than 16% to $94.47 per barrel; Brent for June lost more than 15% to $92.21 per barrel.
- U.S. stock futures surged: Dow +900 points (+2%), S&P 500 +2.1%, Nasdaq +2.5% in after-hours trading.
- Japan’s Nikkei 225 jumped 4.4% early Wednesday; South Korea’s Kospi gained 5.6%.
- Roughly 20% of global oil shipments pass through the Strait of Hormuz, and exports have plunged since the war began.
State of play:
- Iran said the truce is temporary and its military will regulate passage through the strait, giving Tehran “unique economic and geopolitical standing”.
- Trump said the U.S. received a 10-point proposal from Iran that is a workable basis for negotiations and that most past points of contention have been agreed to.
- Iran’s foreign minister said Tehran will allow safe passage during the ceasefire via coordination with its Armed Forces and “due consideration to technical limitations”.
Between the lines:
- The truce is conditional and short, and Iran’s emphasis on “technical limitations” and military coordination suggests the strait may not return to prewar freedom of navigation immediately.
- Analysts say the market is eager for good news, but it remains to be seen whether Hormuz will open fully and sustainably.
What to watch:
- Whether actual tanker traffic through Hormuz increases during the two-week window and if the 10-point proposal evolves into a longer-term deal.
- Any escalation or violations that could end the truce and reignite supply risks.
- Fuel prices and refinery margins as traders price in the likelihood of restored flows.
The bottom line: A fragile, two-week truce has cut oil prices and lifted equities, but the real test is whether Hormuz reopens in practice and for longer than 14 days.