Oil Prices Plunge as US, Iran Agree to 2-Week Ceasefire

Oil prices plunged and US stock futures jumped on Tuesday after President Trump held off on his threat of devastating attacks on Iran. Futures for US crude oil sank 18% to around $92.60, while Brent crude oil futures fell about 6% to $103.40, the AP reports. Both prices remain well above where they were at the start of the war. Futures for the S&P 500 rose 2.4% and Dow futures jumped 2.1%, more than 900 points, reports CNBC. Stock markets in Japan and South Korea also soared, while bitcoin rose more than 5%, the Wall Street Journal reports.

• Late Tuesday, Trump said he was holding off on his threatened attacks on Iranian bridges, power plants and other civilian targets, subject to Tehran agreeing to a two-week ceasefire and reopening of the Strait of Hormuz. Iran's Supreme National Security Council said it had accepted a two-week ceasefire and its foreign minister said passage through the strait would be allowed for the next two weeks under Iranian military management.

Oil prices have spiked because the war has snarled the production and transportation of crude in the Persian Gulf. Much of that oil exits the gulf through the Strait of Hormuz to reach customers around the world, but Iran has blocked it to enemies. A regional official, speaking on condition of anonymity, tells the AP that the two-week ceasefire plan includes allowing both Iran and Oman to charge fees on ships transiting through the strait. The official said Iran would use the money it raised for reconstruction. It wasn't immediately clear what Oman would use its money for. The strait is in the territorial waters of both Oman and Iran. The world had previously considered the passage a toll-free international waterway.

About a fifth of the world's oil transits the strait in peacetime. Abbas Araghchi, Iran's foreign minister, wrote in a statement that: "For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran's Armed Forces and with due consideration of technical limitations." Before the war, there were no "technical limitations," the AP notes.