LONDON: Oil and gas prices plunged, stock markets soared and the dollar retreated on Wednesday after the United States and Iran agreed a temporary ceasefire that could lead to the Strait of Hormuz reopening.

“A wave of relief has hit financial markets after threats of a devastating escalation of the war were replaced by a temporary truce,” said Susannah Streeter, chief investment strategist, Wealth Club.

The most widely traded oil contracts fell some 15 per cent to around $95 a barrel, after a month of conflict that killed thousands and hammered the global economy.

Brent crude futures were down $13.57, or 12.42 per cent, at $95.70 a barrel by 1:28pm ET (1728 GMT). WTI futures slid $16.95, or 15.01pc, to $96.

Stock markets soared, with Wall Street’s three main indexes more than 2pc higher in late morning trading. Europe’s main continental bourses all closed up more than 3pc.

Frankfurt led the way with a 5pc gain. London gained 2.5pc, held back by weak oil companies.

Earlier, Tokyo’s stock market closed up 5.4pc and Chinese indices jumped around 3pc.

The dollar, a safe haven in times of market turmoil, slid against the euro, yen and British pound as investors returned to riskier assets.

But traders warned that the euphoria could be short-lived. Both sides have threatened to resume hostilities if the two-week pause does not lead to an agreement.

“In reality, the markets are not pricing in peace but a window for negotiation,” said John Plassard of Cite Gestion. “And that is precisely the issue: in two weeks, either this window will lead to a lasting agreement, or it will only postpone and amplify the energy shock that everyone fears.” Oil prices remain much higher and equity prices lower than before the US and Israel attacked Iran on Feb 28.

“I don’t think we’re going to (quickly) go back to the levels we were at before the war,” said Kathleen Brooks, research director at XTB traders.

“Energy infrastructure across the Gulf has been targeted.” Maritime monitor Marine Traffic noted that two ships had passed through the waterway since Iran agreed to reopen it, through which much of the world’s oil, gas and fertiliser passes.

But one major German shipping company, Hapag-Lloyd, said it was too early for its trapped ships to set sail out of the Gulf.

Shipping journal Lloyd’s List estimated that around 800 ships have been stuck in the Gulf since the end of February. The International Air Transport Asso­ciation said that it would take months for jet fuel supplies and prices to normalise.

Published in Dawn, April 9th, 2026