Oil price plummets below US$100 on Iran ceasefire deal with Donald Trump, shares rise
Wednesday, 8 April 2026
The price of oil has plunged in the wake of the announcement by United States President Donald Trump of a ceasefire deal with Iran, but Finance Minister Nicola Willis warned there could be a delay before that showed through in lower pump prices.
The price of Brent crude dropped 13% to just over US$94 a barrel in late afternoon trading, after Iran and US agreed to a conditional ceasefire and the safe passage of ships through the Strait of Hormuz.
The price of West Texas Intermediate (WTI) oil was down 15% at just over US$95 a barrel.
WTI had been trading about US$68 before the conflict began on February 28 but had reached a high of about US$116 overnight.
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Willis said that despite the positive development with the ceasefire, it was unclear how quickly cargo would begin to move through the Strait of Hormuz, “should the ceasefire hold”.
“Oil and gas facilities have also been damaged or shut down across the region and these will take time to bring back online,” she said.
“New Zealand is a long way from our fuel suppliers. Prices here typically respond quickly to oil market moves — usually within a week or so — but this may take longer in this instance, given the heightened volatility in markets and the residual uncertainty about the geopolitical situation.”
Auckland Business Chamber chief executive Simon Bridges also sounded a note of caution.
“It’s good to see the ceasefire, but the realist in me says we’ve seen a lot of ups and downs so far and we’re not quite out of those yet.
“I see, internationally, leaders in the likes of Singapore and other parts of Asia are cautioning that the downside scenarios are still there and I think that, sadly, that probably has some realism to it,” Bridges said.
Sharemarket investors responded to the ceasefire with relief.
The NZX top 50 index was trading up 1.4% shortly before its 5pm close, while the ASX top 200 index was up 2.7% in mid-afternoon trading across the ditch.
The developments were also being felt on currency markets.
The New Zealand dollar — which tends to benefit from improved geopolitical stability — was up almost a whole US cent at US58.3c shortly before 5pm, possibly also benefitting from what some economists viewed as mildly hawkish comments from the Reserve Bank.
ASB chief economist Nick Tuffley said the key variable affecting financial markets would be “if we do actually get a material amount of shipping through the strait resuming”.
That would alleviate “some of the concerns over fuel shortages over the next month and a bit, and then we’ll have to see where we go from there”, he said.
“If this does turn into a more prolonged period where the strait is open, then that will start to mitigate the risks of economic damage from a combination of high fuel prices or shortages.”
But it could take some time to restart production at some wells in the Gulf that had to shutter because it was not possible to ship oil away for the region and storage facilities were full, he said.
“You probably also want some some certainty over the ability to keep pumping oil.”
Tuffley forecast the Middle East conflict would have long-running ramifications even if it transpired that the blockade had ended.
“You’re still going to have reconsiderations globally about energy security and resilience to make sure that people can withstand a shock like this.”