Oil Prices Slump as Ceasefire Announced and Strait of Hormuz Reopens

Oil prices plummeted by 16% as markets reacted to the U.S. decision to pause military strikes against Iran, with WTI Crude dropping to the $93.00 level. According to a New York Times report, the U.S. opted for a two-week ceasefire instead of conducting planned strikes on Tuesday, significantly reducing the geopolitical risk premium. This massive drop follows earlier bearish catalysts, including the reopening of the Strait of Hormuz and the truce between Israel and Lebanon. However, Naeem Aslam, CIO at Zaye Capital Markets, noted that the oil market maintains a cautiously bullish bias despite the recent volatility. Technical analysts now identify the $87.00 trendline as the next critical support floor for prices. Market participants are assessing how this shift in energy costs will impact FED policy as Brent and WTI remain under heavy selling pressure.