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Oil prices plunged Wednesday after President Donald Trump agreed to suspend attacks on Iran for two weeks in exchange for Tehran allowing safe passage through the Strait of Hormuz.

U.S. West Texas Intermediate futures with May delivery fell 15.7% to $95.17 per barrel by 5:17 a.m. ET. International benchmark Brent crude futures with June delivery, meanwhile, lost more than 13.6% to $94.38 per barrel.

The WTI could log its worst daily performance since April 27, 2020 if it settles more than 14.52% lower.

Trump said the two-week ceasefire was subject to Iran agreeing to a complete, immediate and safe opening of the Strait of Hormuz. The U.S. has received a 10-point proposal from Iran that is a workable basis for negotiations, he said.

“Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated,” Trump said in a social media post.

Iranian Foreign Minister Seyed Abbas Araghchi said Tehran will allow safe passage through the Strait during the ceasefire via “coordination with Iran’s Armed Forces and with due consideration to technical limitations.”

“If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations,” Araghchi said in a social media post.

The apparent ceasefire came less than two hours before Trump’s 8 p.m. ET deadline for Iran to reopen the Strait. The president had threatened to bomb every bridge and power plant in Iran if its leaders did not meet that deadline.

Trump’s rhetoric had taken an ominous turn Tuesday morning when he threatened to destroy Iran’s entire civilization.

“A whole civilization will die tonight, never to be brought back again,” Trump said in a social media post earlier on Tuesday. “I don’t want that to happen, but it probably will.”

The president said he agreed to the ceasefire after discussions with Pakistan Prime Minister Shehbaz Sharif. The prime minister had asked Trump to delay his deadline to allow negotiations to continue. Sharif also asked Iran to reopen the Strait during that period as a goodwill measure.

Oil exports through the Strait have plunged due to attacks by Iran on commercial ships, triggering the largest disruption of crude supplies in history.

About 20% of global oil supplies passed through the Strait before the U.S. and Israel attacked Iran on Feb. 28. The narrow sea route connects producers in the Persian Gulf to global markets.

The price of crude oil, jet fuel, diesel and gasoline prices have surged during the war. Oil CEOs and analysts have warned that fuel shortages will ripple around the world if the Strait does not fully reopen.

A temporary U.S.-Iran ceasefire sparked a broad relief rally across assets on Wednesday, but experts warned that any deal concerning lasting peace will be complicated by a major trust deficit.

The ceasefire came following hastened diplomatic efforts led by Pakistan and just hours before Trump’s threatened deadline for wiping out the entire Iranian civilization, briefly pulling the region back from the brink of a massive military bombardment.

Oil prices cooled to below $100 per barrel following the ceasefire announcement, but remain far above the pre-war levels of around $70 per barrel.

While U.S. President Donald Trump said the two-week ceasefire was contingent on the “complete, immediate, and safe opening” of the Strait of Hormuz, Iranian officials stated that safe passage through the strait would be “possible,” subject to coordination with its armed forces and “technical limitations” — caveats that may give Iran some room to define compliance on its own terms.

“This is a problem that could derail the ceasefire later this year,” said Matt Gertken, chief geopolitical strategist at BCA Research, warning that the coordination requirement remains a risky ambiguity in both sides’ statements so far.

Trump may temporarily accept Iran as a gatekeeper — with U.S. midterm elections approaching and gasoline prices sharply higher than before the war — but after the election, the U.S. national security establishment will start to demand a more permanent solution,” said Gertken. “Fighting will ignite later this year, if not later this month.”

Tehran also said that its armed forces will cease defensive operations if attacks against Iran are halted. After the ceasefire came into effect at 8 p.m. ET Tuesday, missiles were still launched from Iran towards Israel and several Gulf states.

The reprieve on Tuesday would allow some time for the two sides to reach a longer agreement to end the six-week-old war, which has killed thousands of people and sparked a global energy crisis, with their delegations expected to meet in Islamabad on Friday.

Iran is reportedly finalizing a joint maritime protocol with Oman to institutionalize coordinated management of tanker traffic through the strait, which could embed Iranian authority over the crucial energy artery into a standing bilateral agreement.

Israel agreed to suspend strikes but urged Washington to press for deeper Iranian concessions, including the surrender of enriched uranium stockpiles. In its 10-point terms, Iran requested Washington to accept its uranium enrichment program and the lifting of all sanctions.

The ceasefire will likely hold in the near term, given the economic costs accruing to the global economy from six weeks of conflict, said Michael Langham, emerging markets economist at Aberdeen Investments. “Parties with vested interest in stopping the conflict and reopening the strait will double down on efforts to find a compromise,” he said.

If the truce holds and the strait reopens, the global economic damage should prove manageable, Langham added. Central banks could broadly resume their pre-conflict paths — and attention may shift from inflation to growth, if commodity prices normalize quickly, he added.

“What the market is going to start pricing ahead is a first step towards further de-escalation and perhaps something more permanent,” he said, flagging that the disruption has extended beyond crude oil to commodities such as helium, critical to semiconductor manufacturers in South Korea and Taiwan.

Stocks surged across regions, with Asian benchmarks and U.S. futures climbing, amid rising optimism for a potential turning point in a conflict that has rattled markets for weeks.

Josh Rubin, portfolio manager at Thornburg Investments, cautioned against reading the early market reaction as a definitive verdict. “There’s still low visibility [and] limited predictability” on whether the truce will hold, Rubin said, warning that tail risks remain if the strait remains closed for another two to four months.

Energy and commodity markets are likely to remain on a structurally higher floor regardless of the ceasefire outcome, said BCA Research’s Gertken, as governments hoard and restock in anticipation of renewed conflict, keeping oil and gas prices elevated well above pre-war levels even in a scenario where shipping resumes.

U.S. Treasury yields were down sharply early Wednesday following the announcement of a two-week ceasefire in the Middle East conflict.

Yields on the 10-year U.S. Treasury note — the benchmark for government borrowing —plummeted more than 10 basis points to 4.2399%

Shorter- and longer-dated yields were also scythed as investors piled into U.S. bonds. The yield on the 2-year Treasury note, which more closely follows short-term Federal Reserve rate moves, was down 11 basis points at 3.7193% by 3:35 a.m. E.T. The 30-year Treasury note yield dropped 7 basis points to 4.8482%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

The slide in borrowing costs come as concerns over inflationary pressures created by the five-week conflict ease.

Energy prices rapidly reversed course following the suspension of hostilities. Under the terms of the agreement, President Donald Trump has agreed to halt attacks on Iranian infrastructure, while Tehran will allow the safe passage of ships through the critical Strait of Hormuz waterway “via coordination with Iran’s Armed Forces”, Foreign Minister Abbas Araghchi said in a statement.

Brent crude, the global benchmark, fell below $100 a barrel in early dealmaking, reaching $94.49 — a 13.5% slide.  U.S. West Texas Intermediate dropped almost 15% to $96.20 a barrel.

The Federal Open Market Committee’s March meeting minutes will be released later on Wednesday, as investors recalibrate bets on further Fed interest cuts. Markets will also closely watch the Mortgage Bankers’ Association’s latest 30-year fixed rate — a key barometer of U.S. housing affordability — due out later.

Core monthly and yearly inflation data for March is due out Friday.