Oil prices fell sharply Wednesday morning amid news Iran has agreed to reopen the Strait of Hormuz as a part of its two-week-long ceasefire with the US.
But when that can translate to cost drops at Canadian gas pumps stays unclear as shipping corporations scramble to get their products to market.
Benchmark U.S. crude sank US$16.47 to US$96.48 a barrel Wednesday morning; Brent crude, the international standard, dropped US$13.79 to US$95.48 a barrel.
The national average for normal, unleaded gas in Canada was $1.82.4 per litre Wednesday morning – a rise of two cents from Tuesday, CAA data showed.
The drops reversed a few of the rise in oil prices, following the beginning of the war in late February, which had effectively blocked passage through the strait that’s an important route for global supplies.
Late Tuesday, Trump said he was holding off on his threatened attacks on Iranian bridges, power plants and other civilian targets. Iran’s foreign minister said passage through the strait could be allowed for the following two weeks under Iranian military management.
Tim Waterer, chief market analyst at KCM Trade, told The Associated Press the event has sparked “cautious optimism” moderately than “outright celebration.”
“The ceasefire is simply two weeks long, and markets can be watching closely to see whether shipping through the Strait of Hormuz normalizes as promised and whether the delicate truce can pave the best way for a more durable peace agreement,” he added.
Trump acknowledged late Tuesday a 10-point proposal from Iran on ending the war, which he called “a workable basis on which to barter” a long-term peace deal despite rejecting it a day earlier. Iran’s clauses included an end to conflicts within the region, a protocol for protected passage through the Strait of Hormuz and lifting of sanctions and reconstruction.
Prime Minister Benjamin Netanyahu said in an announcement Wednesday that Israel backed the U.S. ceasefire with Iran but that the deal doesn’t cover fighting against Hezbollah in Lebanon.
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His office said Israel also supports U.S. efforts to make sure Iran not poses a nuclear or missile threat.
Earlier Tuesday, Trump warned that “a complete civilization will die tonight” if Iran didn’t meet his deadline of 8 p.m. Eastern to comply with a cope with the U.S. and reopen the Strait of Hormuz.
“I don’t want that to occur, but it surely probably will,” Trump said in a Truth Social post Tuesday morning, 12 hours ahead of his deadline.
Nonetheless, he added that there was potential for something “wonderful” to occur in Tehran.
“Nonetheless, now that we now have Complete and Total Regime Change, where different, smarter, and fewer radicalized minds prevail, perhaps something revolutionarily wonderful can occur, WHO KNOWS?” he added.
Iranian officials had vowed “an unforgettable hit” and “immediate and proportionate reciprocal measures” if Trump carried through together with his threats. Iranian President Masoud Pezeshkian took to social media on Tuesday to announce that he had registered for military service, together with 14 million Iranians.
Pakistan, which was working towards mediating a ceasefire, urged Trump to increase his deadline and Iran to open the Strait of Hormuz.
Trump’s threat against Iran’s civilization got here after he vowed to bomb every Iranian power plant and bridge over the weekend unless Iran, and dismissed concerns that such actions could amount to a war crime.
Volker Türk, the United Nations high commissioner for human rights, called Trump’s latest threats “sickening” in an announcement.
Prime Minister Mark Carney said Tuesday that Canada “expects all parties on this conflict” to respect international law.
“Which means not targeting, actually, civilians or civilian infrastructure. And we urge all parties on this war to follow those responsibilities as some extent we’ve made publicly and privately,” he said.
Trump’s shifting deadlines for the conflict had raised uncertainty over where the conflict was headed because it entered its second month.
On March 21, Trump issued his first ultimatum to Tehran, giving them 48 hours to permit ships to go through the Strait of Hormuz, which Iran had blocked in response to U.S. and Israeli strikes.
Trump posted on Truth Social that if Iran doesn’t “FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, inside 48 HOURS from this exact time limit, the US of America will hit and obliterate their various POWER PLANTS.”
Iran had until the evening of March 23.
Nonetheless, 12 hours before that deadline, Trump took to Truth Social again to announce that he had decided to postpone the strikes against Iran.
“I HAVE INSTRUCTED THE DEPARTMENT OF WAR TO POSTPONE ANY AND ALL MILITARY STRIKES AGAINST IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR A FIVE DAY PERIOD,” he wrote, adding that was subject to the success of the discussions.
That pushed the deadline out to the top of that week.
On March 26, just before the deadline, Trump first doubled down on his threats, adding that there was “NO TURNING BACK.”
Later that day, nonetheless, he postponed his deadline one other 10 days to April 6 at 8 p.m. Eastern.
On March 30, Trump put celebrating progress within the talks with Iran while also expanding his threatened bombing if a deal wasn’t “shortly reached,” adding that “it probably can be.”
“We are going to conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!),” he wrote.
On Easter Sunday, in an expletive-laden post on Truth Social, Trump threatened Iran’s power plants and bridges in the event that they didn’t open the Strait – and prolonged his deadline once more for twenty-four hours.
“Tuesday can be Power Plant Day, and Bridge Day, all wrapped up in a single, in Iran. There can be nothing prefer it!!!” Trump said, warning Iranians to “open the Fuckin’ Strait, you crazy bastards, otherwise you’ll be living in Hell – JUST WATCH!”
Shortly after that, he simply posted: “Tuesday, 8:00 P.M. Eastern Time!”
He confirmed to reporters Monday that the time referred to his final deadline.
— with files from Reggie Cecchini and the Associated Press and Reuters