US and Iran Agree to Historic Two-Week Ceasefire as Strait of Hormuz Reopens and Global Oil Prices Plunge 16 Percent

In a dramatic reversal just hours before a critical military deadline, the United States and Iran agreed to a two-week ceasefire. The deal includes Iran’s conditional reopening of the Strait of Hormuz, the world’s most important oil chokepoint.

Announced on April 8, 2026, the agreement sent global oil markets into a tailspin. Brent crude fell more than 15 percent to $92 per barrel. US crude dropped below $95, a sharp fall from the $117 high recorded earlier on Tuesday.

The ceasefire came less than two hours before President Donald Trump’s 8 p.m. The deadline, was framed in apocalyptic terms. Trump warned that “a whole civilization will die tonight” if Iran refused to reopen the strait.

He later announced on Truth Social that the United States would suspend bombings and attacks on Iran for two weeks. The pause was contingent on Iran’s complete and immediate reopening of the waterway

Pakistan’s Prime Minister Shehbaz Sharif and military chief, Field Marshal Asim Munir, played a key role in brokering the deal. Earlier, Sharif asked Trump to delay the deadline and urged Iran to reopen the strait as a goodwill gesture.

Sharif has since invited US and Iranian delegations to Islamabad on April 10. The talks are aimed at reaching a permanent resolution

The Strait of Hormuz, through which roughly 20 percent of the world’s daily oil flows, has been effectively blockaded since early March, causing the largest disruption to crude supplies in recorded history. The conflict, now in its sixth week, has sent shockwaves through energy markets, driven US gasoline prices to an average of $4.14 per gallon, and triggered fuel rationing across parts of Asia and Europe.

Stock futures surged on the ceasefire news, with Dow futures jumping over 1,000 points, S&P 500 futures up 2.4 percent, and Nasdaq futures rising nearly 3 percent. Asian markets also rallied sharply, with Japan’s Nikkei 225 gaining 4.5 percent and South Korea’s Kospi jumping 5.5 percent.

However, analysts caution against euphoria. Iran has insisted it will regulate passage through the strait itself, a condition that introduces significant uncertainty. Experts warn that even with a ceasefire in place, full resumption of large-scale oil shipping will take days to weeks, as tanker insurance protocols, port logistics, and geopolitical confidence must all be reestablished. The two-week window is now a critical test of whether a lasting peace deal between Washington and Tehran is achievable