Global oil markets experienced extreme volatility on Monday after U.S. President Donald Trump announced a temporary ceasefire agreement with Iran. Brent crude futures fell from an intraday high of $114.43 to a low of $96, while West Texas Intermediate (WTI) dropped from around $101 to $84.37, marking a decline of over 10% for both benchmarks. The sharp selloff reflected investor hopes that the five-week-old military conflict could de-escalate, potentially reopening the Strait of Hormuz.
Ceasefire Announcement and Market Reaction
President Trump posted on Truth Social that the United States and Iran had held “very good and productive talks over the last two days concerning a complete and final end to our hostilities in the Middle East.” He said the previously issued ultimatum against Iran would be paused for at least five days. Markets quickly priced in the prospect of reduced geopolitical risk, sending crude prices into a tailspin.
However, the rally in risk assets was short-lived. Iranian media outlet Fars News denied that any direct or indirect negotiations had taken place, claiming that Trump “backed down after threats from the Iranian regime to attack power plants in U.S. ally countries.” According to Axios, mediators from Turkey, Egypt and Pakistan were indeed involved. “The mediation is ongoing and making progress. The discussion is about ending the war and resolving all outstanding issues,” a source familiar with the matter said, adding that they hoped for answers soon.
Bitcoin Breaks $70,000
The ceasefire news also boosted risk assets like cryptocurrencies. Bitcoin jumped above $70,000 for the first time in nearly a month, recovering from the low-$60,000 range seen during the peak of the conflict. The rally reflected a temporary shift away from safe-haven assets such as gold. Investors now await further clarity on the Iran situation.
U.S. Gasoline Prices Surge
The three-week conflict has already taken a toll on American consumers. The average price of regular gasoline in the U.S. surged from $2.98 per gallon on February 26 to nearly $4.00 per gallon, an increase of more than 30%. Any sustained ceasefire could ease gasoline inflation, but Iran’s denial of talks leaves the outlook uncertain. As of press time, Brent crude had recovered to around $100, while WTI traded near $90.
The conflicting narratives underscore the fragile nature of the ceasefire and the risk of renewed volatility. Both oil and crypto markets remain highly sensitive to headlines from the Middle East.