WTI Crude Plunges 16 Percent to $94 Per Barrel as Trump Announces Two-Week Iran Ceasefire and Hormuz Shipping Talks Begin

WTI crude oil futures posted their steepest single-day decline in nearly six years on Tuesday, plummeting more than 16 percent from recent highs to settle near $94.62 per barrel after President Donald Trump announced a two-week suspension of military operations against Iran. Brent crude fell in tandem, dropping below $100 per barrel and ending a streak of record-setting prices that had roiled supply chains, inflated transportation costs, and squeezed refinery margins across North America, Europe, and Asia.

The selloff unfolded within hours of Trump's announcement that Washington had received a 10-point proposal from Tehran that he described as a workable basis for negotiations. The ceasefire window is contingent on Iran immediately restoring safe passage through the Strait of Hormuz, the 34-kilometer chokepoint through which approximately 20 percent of global seaborne crude oil moves each day.

From $112 to $94: A Market in Whiplash

Just 24 hours before the ceasefire announcement, WTI had been trading above $112 per barrel as markets priced in the risk of a sustained Hormuz closure and potential direct U.S. military strikes on Iranian energy infrastructure. Iran's move to charge $2 million per vessel for Hormuz transit rights had accelerated the price surge, with WTI climbing nearly 6 percent in a single session as traders absorbed escalating geopolitical risk. Tuesday's reversal erased those gains entirely, with WTI briefly touching levels below $90 per barrel intraday before settling near $94.62.

Goldman Sachs had described the Hormuz disruption as the largest supply shock in the history of the global crude market. Middle East production outages peaked at approximately 9.1 million barrels per day in April, driving a global inventory draw estimated at 5.1 million barrels per day in the second quarter of 2026. The impact on Canadian synthetic crude had been equally dramatic, with diesel-rich Alberta bitumen barrels surging to a nearly $19-per-barrel premium over WTI in late March as European and Asian refiners scrambled for alternatives to disrupted Middle Eastern supply.

Western Canadian Select and Canadian Producer Exposure

Western Canadian Select, the benchmark blend for Alberta heavy oil, retreated sharply alongside WTI as the ceasefire news reduced the premium that diesel-scarce refiners had been paying for Canadian barrels. The WCS differential, which had tightened significantly during the peak of the Hormuz crisis, is expected to widen again as market participants reassess the probability of sustained supply disruption.

Cenovus Energy, which is targeting approximately 985,000 BOE per day in 2026, and Suncor Energy both saw share prices ease following the ceasefire announcement as the commodity tailwind that had briefly boosted Canadian integrated producers reversed course. For Alberta operators selling into U.S. Gulf Coast markets, a strengthening Canadian dollar relative to the USD, which tends to accompany commodity price stabilization, adds further pressure on netbacks already affected by the widening differential.

Canadian oil sands producers with Trans Mountain Expansion access have been better positioned than most to redirect barrels toward Pacific Rim markets during the Hormuz crisis, but the partial normalization of Atlantic Basin supply chains now reduces that arbitrage opportunity.

Is the Ceasefire Durable?

Analysts cautioned that Tuesday's sharp price collapse may be premature. The two-week window is narrow, and Iran had not formally confirmed it would stand down naval forces or restore unrestricted Hormuz passage as of Tuesday evening. Senior oil traders noted that supertanker transits remain suspended in practice until the Islamic Revolutionary Guard Corps issues a clear stand-down order. Any breakdown in the 10-point framework could send WTI back above $100 within days.

The U.S. Energy Information Administration had sharply revised its 2026 WTI price forecast upward to reflect the extended disruption scenario; that forecast is now under review. Futures markets showed implied volatility remaining extremely elevated, signaling that options traders expect continued large price swings over the next 30-day period.

What Markets Are Watching

The ceasefire window runs through approximately April 21. Key signposts include Iran's formal response to the 10-point framework, any confirmed resumption of supertanker transits through Hormuz, and a potential emergency OPEC+ meeting to address the rapidly changed supply picture. The April 7 evening market wrap captured the pre-ceasefire tension that preceded Tuesday's dramatic reversal, with traders then pricing in an imminent escalation that did not materialize on the timeline expected.

For North American producers, refiners, and consumers, the next two weeks could determine whether crude markets re-anchor near $95 per barrel or resume the climb toward the $112 to $120 range that had characterized April trading before the ceasefire announcement. WCS prices, pipeline nominations on Trans Mountain, and the broader energy equity complex will all move in close correlation with developments in Washington and Tehran over that period.