Oil prices crash after Trump Iran ceasefire - bringing relief to UK motorists
Oil prices have plunged following Donald Trump's ceasefire with Iran, with crude oil dropping from $117 to $93 per barrel - offering welcome relief to drivers
Oil prices tumbled across the board yesterday after Donald Trump announced a two-week ceasefire with Iran.
The halt will see the Strait of Hormuz reopen, causing US crude oil to slide 18 percent to below $93 (£70) a barrel, having traded as high as $117 (£87) earlier that very same day. The falls represent the steepest single-day decline in oil prices since the Gulf War in 1991.
Prices for natural gas and heating oil also dropped considerably following the ceasefire announcement. Brent crude oil futures fell around six percent to $103.40. Both prices nonetheless remain significantly higher than they were at the outset of the conflict.
Mr Trump, 79, agreed to the two-week ceasefire to allow negotiations to progress, having previously threatened to "completely destroy" Iranian civilisation. However, Iran's state television ridiculed the world leader in the wake of the decision.
Shipping through the Strait of Hormuz, a critical chokepoint in the Persian Gulf through which 20 percent of the world's oil ordinarily passes, had been almost entirely suspended.
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However, NBC News now reports that Dow futures climbed 1,000 points, Nasdaq 100 futures rose by nearly three percent and S&P 500 futures increased by over 2.5 percent following Mr Trump's announcement.
Concerns over the cost of living, including oil and petrol prices, had been mounting since the conflict erupted last month.
Figures from the RAC reveal the average price of a litre of diesel at UK forecourts reached 185.2p, up 30 percent since hostilities commenced.
This has hit motorists who rely on the roads for both work and leisure, among them 39 year old James Airey, owner of landscaping firm Lawn and Order in Watford, Hertfordshire.
He said: "If I don't fill the vans up, or fill the tools up, then I can't earn a living. Everything smooths out after a while, but I'm really noticing a big difference.
"I'm laying out about £300 a week before I make anything back. If I work the weekend, which we sometimes will, that's more money as well.
"If I think 'no, I can't pay the extra' then I lose that whole day's work, lose my customers, lose my business - so it's just something you have to overcome."
The fall in oil prices will therefore come as a welcome relief to Britons, particularly those who regularly depend on the roads.
In the bond markets, Treasury yields eased following reports of a potential cease-fire. The yield on the 10-year Treasury dropped to 4.24 percent from 4.30 percent earlier on Tuesday.
That remains considerably higher than its 3.97 percent level prior to the conflict, and the increase has driven up rates for mortgages and other loans for US households and businesses, placing a drag on the economy.
