In a sudden diplomatic breakthrough, U.S. President Donald Trump and Iran have agreed to a two-week ceasefire mediated by Pakistan, prompting oil prices to plunge over 14% and U.S. stock futures to surge.
Ceasefire Terms
- The agreement, announced on April 6, 2026, suspends hostilities for two weeks, contingent on Iran reopening the Strait of Hormuz.
- Iran submitted a 10-point proposal, which Trump described as a "workable basis" for negotiations in a Truth Social post.
- Iran's Foreign Ministry confirmed Tehran would allow safe passage through the strait, subject to coordination with its military and technical constraints.
Immediate Market Impact
- U.S. stock futures rallied sharply following the announcement.
- Oil prices dropped more than 14% to below $100 per barrel, easing pressure on global supply chains.
- The decline follows weeks of oil flow disruptions that had inflated costs, including near-doubled jet fuel prices.
Pre-Agreement Escalation
- Trump had intensified threats, warning of massive strikes on Iran's civilian infrastructure and claiming "a whole civilization will die" if demands were unmet.
- Prior negotiations focused on longer ceasefires, up to 45 days, but Trump rejected temporary truces, seeking a permanent resolution.
- The ceasefire follows recent military actions, including a U.S. strike on Iran's Kharg Island oil terminal and an Iranian missile attack on Saudi Arabia's Jubail industrial hub.
Broader Implications
- The pause offers temporary relief for global markets and supply chains amid ongoing tensions.
- Long-term stability remains uncertain as underlying disputes persist.