By Lesedi Sibiya-Diplomatic Insider

On Wednesday oil prices have taken a plunge as the stocks have rallied after the US and Iran have announced a two-week ceasefire that has allowed Iran’s capital, Tehran, to temporarily reopen the vital strait of Hormuz.

Donald Trump recently threatened the Islamic Republic stating that they should open the waterway or else they will face obliteration. He announced that attacks should cease for two weeks and that he had received a ten-point proposal.

 Iran had agreed to a safe passage in the strait, through which a fifth of the global oil and gasses passes through. West Texas is losing almost 20% and Brent is sitting at 16% in crude oil prices. On Wednesday Brent Crude oil was trading at around $94.71 per barrel which went down from $111 the previous day.

This gave general optimism for equities that the conflict between the two countries will be coming to end soon which had initially raised some very huge concerns for various markets. Seoul had jumped to more than 6% with Tokyo sitting at more than 5% and Taipei added 4.2% with Sydney and Hong Kong advanced more than 2%.

 On Tuesday Trump tweeted that a “whole civilisation will die” if Iran did not open the Strait of Hormuz as he vowed to bomb bridges, power plants, and other civilian infrastructure in Iran. Iran also made threats of their own stating that they will deprive the United States as well as its allies of oil and gas for the years to come if America attempted to launch an attack on Iran.

 “Subject to the Islamic Republic of Iran agreeing to the COMPLETE. IMMEDIATE, and SAFE OPENING of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.”

 The Ceasefire has also seen a decline in the dollar as the Euro, pound, and yen all strengthened. Gold rallied after being hit with concerns of a sharp rise in inflation which keep interest rates elevated as bitcoin has also risen .