\n<\/p>\n
Oil prices tumbled on Wednesday and global stock markets rallied after the US and Iran agreed a two-week conditional ceasefire<\/a>.<\/p>\n Investors welcomed the news that Donald Trump<\/a> had held off on his threat to bomb Iran into \u201cthe stone ages\u201d, while Iran\u2019s foreign minister, Abbas Araghchi, said passage through the strait of Hormuz would be allowed for the next two weeks under the management of Iran\u2019s military. Wall Street recorded its biggest single-day rally in a year.<\/p>\n Oil fell below the $100-a-barrel mark, even though it was not certain that the US would accept a 10-point proposal drawn up by Iran<\/a>. How the strait will be reopened and managed beyond the two-week grace period is yet to be determined.<\/p>\n Brent crude oil, the international standard, dropped by 16%, while US crude oil futures sank by 17.6%. However, prices later recovered off their lows as Israel launched its biggest attacks yet on Lebanon and on reports that Iran<\/a> halted the passage of oil tankers because of an alleged Israeli ceasefire breach. Reports of an attack on Saudi Arabia\u2019s huge east-west pipeline to the Red Sea, which allowed oil exports to avoid the strait, also nudged prices higher.<\/p>\n Kathleen Brooks, a research director at the trading platform XTB, said markets would be monitoring the fragile truce. \u201cOnly if the US or Iran walk away from the ceasefire completely and bombing restarts do we see the oil price potentially surging back to the highs of this week above $110 per barrel for Brent crude, which could also cause stocks and bonds to slump,\u201d she said.<\/p>\n By late Wednesday afternoon London time, Brent crude was down 13.5% at $94.36 a barrel. US crude was down 15.5% at $95.36 a barrel, heading for its biggest one-day fall since the Covid-19 lockdowns six years ago.<\/p>\n The prices remain well above where they were before the start of the Iran war, when Brent traded below $73 a barrel.<\/p>\n <\/gu-island><\/p>\n Reuters reported on Wednesday that investors placed a combined $950m bet on oil prices falling, hours before the ceasefire was announced.<\/p>\n With just over an hour until his deadline was due to pass on Tuesday, the US president said he was holding off on threatened attacks on Iran, subject to Tehran agreeing to a two-week ceasefire and reopening the strait of Hormuz.<\/p>\n Soon after, Iran\u2019s national security council confirmed it had accepted a two-week ceasefire<\/a> if attacks against Iran were halted. Tehran said peace negotiations with the US would begin in Islamabad on Friday.<\/p>\n European stock markets rallied strongly on Wednesday. The pan-European Stoxx 600 index gained 3.7%, its biggest one-day rise in a year. Travel and leisure stocks soared, with Air France gaining 13%, Lufthansa\u2019s shares jumping by 8%, the British Airways owner, IAG, up 8%, and the holiday group Tui gaining almost 10%.<\/p>\n In London, the FTSE 100 index closed up 2.5% at 10,608.9 points, its highest end-of-day level since the early days of the Iran war. Oil<\/a> company shares tumbled, though, with BP down 6% and Shell losing 4.7%.<\/p>\n US stock markets also jumped as Wall Street hailed the ceasefire, with the benchmark S&P 500 rallying by 2.5% to 6,782.81. The Dow Jones industrial average gained more than 1,300 points, or 2.9% \u2013 its best day since April 2025 \u2013 to finish at 47,909.92 as travel company shares soared but oil producers slumped. The tech-focused Nasdaq Composite meanwhile advanced 2.8% to 22,634.99.<\/p>\n That followed strong gains in Asia Pacific markets, where Japan\u2019s benchmark Nikkei 225 gained more than 5%, Australia\u2019s S&P\/ASX 200 jumped 2.55% and South Korea\u2019s Kospi soared by 7.5%. Hong Kong\u2019s Hang Seng was up 3.1%, while China\u2019s CSI 300 index gained 3.2%.<\/p>\n