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Oil, gas prices plunge as US, Iran agree 2-week truce
By Frank Prenesti
Date: Wednesday 08 Apr 2026
(Sharecast News) - Oil prices plunged on Wednesday after the US and Iran agreed a two-week conditional ceasefire that included the re-opening of the vital Strait of Hormuz waterway after a last-minute diplomatic intervention by Pakistan.
The truce came after US President Donald Trump called for Tehran to capitulate or face widespread bombing of power plants and bridges, warning that "a whole civilization will die tonight, never to be brought back again. I don't want that to happen, but it probably will".
Pakistan Prime Minister Shehbaz Sharif mediated the truce, requesting the 14-day break from hostilities in order to "allow diplomacy to run its course". Iran has submitted a 10-point peace plan, which includes the retention of its uranium enrichment programme.
Benchmark Brent Crude fell almost 14% to $94.47 a barrel, while US West Texas Intermediate slumped 16% to $94.74. Month-ahead gas prices on the Dutch exchange were down 14.7% to €45.41 per kilowatt hour.
However, oil prices are still well above the $72 and $65 levels respectively on February 27 - the day before the US and Israel started their war of choice on Iran which resulted in the effective closure of the Strait of Hormuz, while gas was sitting at around €32 five weeks ago.
"There has been an impressive reaction to the news that the US and Iran will engage in a two-week ceasefire. Stocks are jumping, bond yields are sharply lower, and the oil price is plunging," said Kathleen Brooks, research director at XTB.
"However, it is worth noting that the oil price is still elevated and is above $90 per barrel, well above the $81 per barrel average for Brent crude over the last 12 months."
"This buys time for a long-lasting peace deal to be negotiated. There is a risk that the deal could come undone in the coming days, Iran's 10-point plan for peace includes a demand for Washington to accept its uranium enrichment programme. This seems like it will be a major sticking point, especially since Donald Trump has repeatedly claimed that the whole aim of the war was to eradicate Iran's nuclear capabilities."
"For the Strait of Hormuz to operate effectively, insurers and shipping operators need to be comfortable that that risk of ships passing through the Strait has decreased. Over 800 tankers are currently stuck in the Strait, we need to see movement of these in the coming days for the drop in the oil price to be sustained."
Reporting by Frank Prenesti for Sharecast.com
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