Oil falls below $100 and Asian stock markets climb after ceasefire in Iran

Oil plunged below $100 and stock markets soared Wednesday, after United States and Iran will agree to a two-week truce in which Tehran is expected to reopen the strategic Strait of Hormuz.

In early trading on Asian markets, U.S. benchmark West Texas Intermediate (WTI) crude fell 16.56% to $96.39 per barrel, while Brent, the international benchmark, gave up 15.89% to 93.38.

After more than a month of attacks by the United States and Israel, Iran said it had agreed to talks with Washington starting Friday in Pakistan aimed at ending the conflict.

"Subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks," President Donald Trump wrote on his Truth Social platform.

Iranian Foreign Minister Abbas Araqchi confirmed the two-week safe passage of ships through Hormuz, the gateway for a fifth of the world's oil that Tehran closed in retaliation for the war.

"Once the White House backed down and replaced the impending escalation with a conditional two-week ceasefire, the oil market is beginning to return to a smoother, more balanced operation," with the "risk premium" of recent days disappearing, noted Stephen Innes of SPI Asset Management.

Stocks and gold respond

In the stock sector, Japan's Nikkei 225 indexrose 4.38% to 55,771.56 points, while the South Korean Kospi climbed 5.71% to 5,808.65 units.

"As fears of escalating fighting dissipate, buying is likely to take the lead in the Japanese market," Tokai Tokyo Securities said before the opening bell of the Japanese stock market.

Gold, which had been hit in recent weeks by the prospect of rising inflation and rate hikes by central banks, also regained its breath after the announcement of a ceasefire in Iran.

By 00H20 GMT, the yellow metal was up 2.30% to $4,815 an ounce.

Meanwhile, the U.S. dollar fell sharply against the euro and the yen, in line with the drop in oil prices. It fell 0.63% against the Japanese currency, to 158.62 yen per dollar.