Oil prices plummeted on Tuesday after President Donald Trump agreed to a two-week ceasefire with Iran, spurring hopes that more oil tankers would be able to transit the key Strait of Hormuz soon.

But analysts warned that questions remained, including what will change for the effective blockade of the strait, through which about 20% of the world’s oil passes, and whether the ceasefire will lead to a long-term end to the war.

US crude futures declined more than 15% after hours to less than $95 a barrel - a significant drop, but still well above the $67.02 settled on February 27, before the war began. Brent crude futures, the global benchmark, declined 12.88% to $95.12.

Meanwhile, US stock futures and Asian markets jumped. Dow futures leapt more than 900 points, or about 2%, S&P 500 futures increased 2.1%, and Nasdaq futures rose about 2.5% in after-hours trading.

On Wednesday morning, Japan’s benchmark index Nikkei 225 surged 4.9% as of 10:41 am local time, while South Korea’s Kospi gained 5.7%. Hong Kong’s Hang Seng index rose 2.8%.

“The market has been eager to get good news, but it remains to be seen if the Strait of Hormuz opens fully,” Bob McNally, founder and president of Rapidan Energy Group, told CNN. “That’s the whole ball of wax, and so far Washington and Tehran seem to be talking past each other on that.”

While Trump celebrated on social media, Iran emphasised that the ceasefire was only temporary. “This is not the end of the war, but all military branches should follow the Supreme Leader's order and cease their fire,” according to a statement read out on state-run news channel IRIB.

Still, the jump in stocks and the slump in oil prices sent an “extremely clear” message, Art Hogan, chief market strategist at B. Riley Financial, told CNN: “Investors would like to get the Strait of Hormuz open and this conflict behind them.”

Trump agreed to the ceasefire less than two hours before his 8 pm ET deadline to destroy a “whole civilisation.” He said the agreement hinged on the reopening of the Strait of Hormuz.

“We received a 10-point proposal from Iran, and believe it is a workable basis on which to negotiate,” Trump posted on Truth Social on Tuesday night.

The war in the Middle East – and the effective closure of the crucial Strait of Hormuz – has caused the biggest oil supply shock on record, affecting roughly 12 million to 15 million barrels of crude oil a day. Both the futures and physical oil markets had signalled major warning signs.

But whether the Strait can simply return to business is up in the air. Iran also claimed victory and said its military will regulate passage through the Strait of Hormuz, which would grant Iran “unique economic and geopolitical standing,” a statement from Iran’s Secretariat of the Supreme National Security Council said.

The ceasefire “hasn’t really clarified anything when it comes to the Strait,” Patrick De Haan, head of petroleum analysis at GasBuddy, said on X Tuesday.

And the longer-term effects will take a while to shake out.

“Beyond the near term, Iran’s ruling regime has (arguably) solidified its political control, and has demonstrated its capacity for bringing global oil and gas markets to their knees…,” wrote Karl Schamotta, of Corpay Currency Research, in a note Tuesday evening.