Oil drops 13%, closes below $100

Brent crude futures for June delivery dropped 14% to $93.89/bbl

Oil plunged today, April 8, following the announcement by the US President of a two-week ceasefire agreement with Iran, conditional on the reopening of the Strait of Hormuz.

Brent crude futures for June delivery fell 13.29%, or $14.52, to $94.75 a barrel. WTI crude oil futures for May delivery fell 16.41%, or $18.54, to $94.41 a barrel.

The truce was announced on April 7 just before the deadline set by US President Donald Trump for Iran to open the strait or face large-scale attacks. Despite the condition of reopening the Strait of Hormuz, the vital shipping lane remains effectively closed.

Newspaper reports today stated that both the Iranian Revolutionary Guard and army forces halted oil tanker traffic through the strait following Israeli attacks on Lebanon.

A few hours later, the Speaker of the Iranian Parliament, Mohammad Baqer Qalibaf, announced that the ceasefire agreement had been violated after three clauses of the framework negotiation plan submitted to the US were breached, including the failure to stop hostilities against Lebanon.

Oil prices came under additional pressure due to signs of weak fuel consumption in the US, as official data showed commercial crude inventories rose by 3.1 million barrels last week.