After the announcement, traders are watching whether oil will surge toward US$150 or sink closer to US$90
Oil prices have whipsawed from brushing US$120 to plunging below US$100 in hours, and the next two weeks could decide whether crude surges toward US$150 or sinks closer to US$90.
US President Donald Trump has agreed to a two‑week ceasefire with Iran in exchange for reopening the Strait of Hormuz, triggering a sharp drop in crude and a relief rally in equities, while leaving inflation, earnings and rate expectations finely poised.
Trump said he would “suspend the bombing and attack of Iran for a period of two weeks” if Iran agrees to the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.”
He called this a “double sided CEASEFIRE” and said it stems from a 10‑point Iranian proposal that the US views as a “workable basis” for negotiations.
Iranian Foreign Minister Abbas Araghchi said ships will be able to pass through the Strait during the ceasefire “via coordination with Iran’s Armed Forces and with due consideration to technical limitations.”
Iran’s Supreme National Security Council, cited by CNBC, claimed the United States has “surrendered to the will of the Iranian people,” while warning it will return to fighting if its demands are not met.
Before the truce, markets were trading a simple escalation‑versus‑de‑escalation story.
Speaking to BNN Bloomberg, Brian Mulberry, chief market strategist at Zacks Investment Management, said “the main story is escalation versus de‑escalation.”
On the escalation side, he warned that if there were no concessions from Iran and an attack went ahead, oil could break above the recent US$123.70 close and climb toward “US$140 to US$150 a barrel, similar to levels seen during the Ukraine conflict a couple of years ago,” worsening the energy shock.
On the de‑escalation side, Mulberry said that if an agreement prevents strikes, oil could drop “toward US$90 a barrel” and that move would be “deflationary relatively quickly” as tanker traffic through the Strait normalizes.
He told BNN Bloomberg that current flows of about 20 to 30 ships per day remain below normal, but “a return to typical flows would ease prices quickly.”
Mulberry highlighted US$124 as a key resistance level, calling it the recent high and a technical line that, if broken, could mean “another 15 to 20 percent higher,” pushing crude towards roughly US$140.
Staying below that level, he said, would help contain inflation pressure relative to a worst‑case outcome.
He added that a return to US$60 is possible “maybe a year from now,” but would require normal trade conditions and investment to restore damaged refining capacity in Gulf states.
The immediate price action has matched the geopolitical flip.
NBC News reported that US crude earlier in the day jumped as high as US$117.63 and later traded around US$112, while Brent rose to US$111.80 before trading near US$109.
After Trump announced the ceasefire, CNBC said West Texas Intermediate for May delivery fell more than 16 percent to US$94.47 and Brent for June lost more than 15 percent to US$92.21.
The Associated Press similarly reported US crude futures down 14.3 percent to US$96.83 and Brent down 13.3 percent to US$94.74.
That reversal powered a relief rally in risk assets.
Futures on the S&P 500 rose 2.3 percent and Dow futures 2 percent.
CNN reported that Dow futures climbed more than 900 points, about 2 percent, while S&P 500 and Nasdaq futures gained just over 2 percent.
The Associated Press also noted that Japan’s Nikkei 225 rose 4.8 percent and South Korea’s Kospi 5.6 percent after news of the ceasefire and planned reopening of the Strait.
For households and businesses, the key transmission channel remains fuel.
NBC News reported that the average US gasoline price has jumped to US$4.14 per gallon, while diesel has climbed to US$5.64, near its all‑time high.
The US Energy Information Administration expects retail gasoline to “peak at a monthly average of close to US$4.30 per gallon in April” and diesel to “peak at more than US$5.80/gal.”
Mulberry told BNN Bloomberg that “in the short term, it’s mainly wholesale prices,” with “diesel costs… significantly higher than regular gasoline” since the global supply chain depends on diesel.
He said this is driving up wholesale input costs and warned that if oil stays above US$120 through the summer, those increases will begin to pass through more obviously to consumers.
On positioning, Mulberry described refiners as one of the most direct hedges against an oil shock.
He told BNN Bloomberg that “one of the biggest hedges against an oil shock is owning refining stocks,” pointing to Chevron, Exxon and ConocoPhillips, and said their shares are up about 25–30 percent alongside crude.
With these companies operating near full capacity and little new refining capacity built in the Western Hemisphere “in decades,” he argued they are well placed if prices stay elevated.
Strategists still sound cautious about outright risk‑on moves.
Reuters reported that Charu Chanana at Saxo sees the “pivotal test” in whether insurers and tanker operators regain enough confidence for traffic through Hormuz to run normally.
Société Générale analysts, cited by NBC News, said the outlook now splits between “a fragile détente” with gradual supply recovery and a “protracted conflict” with “structurally higher risk premia” and extreme stockpiling.
For now, markets are trading a fragile relief.
The next two weeks of negotiations in Islamabad, the actual tanker count through the Strait, and the inflation prints that follow will determine whether this is the peak of the current oil shock — or just one more violent swing in a new, more volatile energy regime.
