US and Iran Agree to Conditional Two-Week Ceasefire, Oil Prices Slide

The United States and Iran have agreed to a conditional two-week ceasefire, linking the pause in hostilities to the reopening of the Strait of Hormuz, a critical artery for global energy supplies.

US President Donald Trump said he would suspend bombing and military action against Iran for two weeks, describing the proposal as a “double-sided ceasefire”. The pause is contingent on Tehran ensuring the “complete, immediate and safe” passage of ships through the Strait of Hormuz. The waterway is vital for oil exports from Gulf Cooperation Council countries, which have consistently described it as an economic lifeline.

The US President also indicated that Iran has shared a ten-point proposal with the US and Israel, which he described as a “workable basis” for negotiations. According to Trump, most longstanding points of contention between Washington and Tehran have been addressed in principle, with the proposed ceasefire window intended to finalise a broader agreement.

Iran has signalled acceptance of the temporary arrangement. Officials stated that safe maritime transit through the Strait of Hormuz would be ensured during the two-week period through coordination with Iranian armed forces. Talks are expected to begin in Islamabad later this week, suggesting a diplomatic track is being prioritised alongside de-escalation efforts.

Yet Iran’s position continues to emphasise its control over the Strait, a stance that may remain a key sticking point. Gulf Cooperation Council nations have repeatedly rejected any shift in the status of the passage, underscoring potential friction even as negotiations advance.

Financial markets responded swiftly to the easing of geopolitical tensions. Global crude oil prices fell sharply following the announcement of the ceasefire proposal and Iran’s agreement to temporarily reopen the Strait. Brent crude declined 15.19% to $92.67 per barrel, while West Texas Intermediate crude futures dropped 15.02% to $96.03 per barrel.

Market participants are likely to monitor the progress of negotiations closely, as any breakdown in talks or renewed restrictions on the waterway could quickly reverse the decline in oil prices.

While the proposed ceasefire marks a potential turning point, its durability will depend on resolving underlying strategic differences, particularly around control and security of the Strait.