Oil prices fell sharply on Wednesday, with both Brent crude and US West Texas Intermediate (WTI) crude slipping below $100 a barrel, after President Donald Trump announced a two-week ceasefire with Iran on the immediate reopening of the Strait of Hormuz.Brent crude fell 13.6 percent to $94.43 a barrel in early trading hours, while WTI fell more than 14.3 percent to $96.82 a barrel, Reuters reported. Prices fell after Trump said he had agreed to a temporary ceasefire with Tehran, reducing fears of a prolonged supply disruption through the Strait of Hormuz, a vital passage through which about 20 percent of the world’s oil supply passes.Markets reacted sharply to the development, with oil posting its biggest decline in nearly six years, according to Bloomberg, while global equities jumped on hopes of easing geopolitical tensions in the Middle East. Trump’s announcement comes just ahead of his stated deadline for Iran to ensure safe passage through the strait or face potential attacks on its civilian infrastructure.In a series of posts on Truth Social, he described the agreement as a “two-way ceasefire”, after earlier warning that “an entire civilization will die tonight” if the terms were not met.Iran, for its part, said it would halt its attacks if aggression against it stopped, and would facilitate safe transit through the Strait of Hormuz for two weeks in coordination with its armed forces, according to Foreign Minister Abbas Araqchi.However, the situation on the ground remains tense, with several Gulf countries reporting missile launches, drone activity or issuing advisories urging citizens to seek shelter.Analysts cautioned that although the ceasefire provides short-term relief, risks to oil supplies remain elevated. “Even with a peace agreement, Iran may be encouraged to repeatedly threaten the Strait of Hormuz in the future, and markets will price in increased risk to the Strait of Hormuz going forward,” said MST Marki analyst Saul Kavnik.Expressing similar concerns, IG analyst Tony Sycamore highlighted that although the ceasefire could pave the way for a more permanent reopening of the strait, significant uncertainties remain.“This is a good start and may pave the way for a more permanent reopening — but there is still a lot of work to do,” Sycamore said. The recent conflict between the US, Israel and Iran had already sent oil prices sharply higher, with March seeing the sharpest monthly increase on record, more than 50 percent.