Global Oil Prices Slide After Trump Announces Two-Week Ceasefire as Kenya Petrol Stations Report Shortages

Oil prices dived on Wednesday after US President Donald Trump announced a two-week ceasefire with Iran. The move came less than two hours before a deadline he had set for Tehran to reopen the Strait of Hormuz or face attacks on civilian infrastructure.

Futures reacted immediately. US crude dropped around 15 percent to $96.31 a barrel. Brent crude fell 13 percent to $95.36 a barrel. Stocks surged at the same time. S&P 500 futures climbed more than 2 percent while European futures jumped over 5 percent.

The announcement capped weeks of tension that began with US and Israeli strikes on Iran at the end of February. Tehran responded by restricting traffic through the Strait of Hormuz, a chokepoint that normally carries about 20 percent of the world’s oil and gas.

In Kenya the effects of that six-week disruption have already reached the pumps. Motorists in Nairobi and other towns have found stations running dry or limiting sales. Construction crews have faced delays hauling materials and running heavy machinery on sites where diesel supplies have grown erratic.

The price slide offered some immediate breathing room. Lower global benchmarks usually feed through to Kenya Power and Kenya Pipeline Company import costs within days or weeks. Contractors who have watched fuel expenses eat into margins on road upgrades and building projects could see relief if the ceasefire holds and tanker traffic resumes.

Yet traders and analysts stopped short of declaring victory. Martin Whetton at Westpac noted that people were not rushing to take new risks. “It would have to actually be a lasting peace to change things,” he said.

Charu Chanana at Saxo pointed to the next two weeks as the real test. Insurers and tanker operators would need to regain confidence before normal flows returned through the strait. Only then would the drop move beyond a relief rally.

Gold prices climbed more than 2 percent to $4,812 an ounce as investors kept some safe-haven exposure. The US dollar weakened broadly. The Australian dollar rose 1 percent and the euro gained 0.68 percent.

Treasury yields fell as traders priced in the chance of Federal Reserve rate cuts later this year. The benchmark 10-year note yield dropped 9.5 basis points to 4.247 percent.

Still, caution ran through the market talk. Carol Kong at Commonwealth Bank of Australia said the conflict’s root causes remained unresolved. She expected the war could drag into June, meaning any dollar weakness might prove temporary.

For Kenya’s construction sector the uncertainty matters. Many ongoing infrastructure works rely on steady diesel deliveries for excavators, tipper trucks and generators. Shortages have already forced some contractors to idle equipment or pay premium prices on the informal market. A sustained lower oil price would help contain overall project costs, but only if supply lines stabilise.

The broader economy has felt the pinch too. Higher fuel costs feed into everything from cement transport to asphalt production. Government budgets for roads and energy projects have come under pressure since the strait restrictions began.

Investors in Asia showed the same mix of relief and hesitation. Japan’s Nikkei rose about 5 percent and South Korea’s KOSPI climbed 6 percent, briefly halting trade. The regional index outside Japan gained 4 percent.

Back in the Middle East the ceasefire offered a pause after Trump’s earlier warning that “a whole civilization will die tonight” if demands were not met. That abrupt reversal lifted sentiment across commodity and equity markets.

Even so, the six-week conflict had already reignited inflation worries and scrambled rate outlooks worldwide. Governments and companies scrambled for hedges against the energy shock.

In Kenya the immediate focus stays on whether the two-week window brings tankers back online. Until then, petrol station shortages will continue to ripple through daily life and the construction sites that depend on reliable fuel.

The market’s swift reaction showed how closely global oil flows tie into local realities. For now the slide has eased some pressure, but contractors and motorists alike know the next fortnight will decide whether the relief lasts.