Crude fell about 16% in a day when a two-week US-Iran pause put the Strait of Hormuz back on the board

The most consequential thing that happened to oil prices on April 8 was not a demand figure or an inventory draw. It was an announcement. With about ninety minutes to run before a deadline he had set for Iran, the US president said he was holding off on threatened attacks, subject to Tehran agreeing to a two-week ceasefire and reopening the Strait of Hormuz. Iran's national security council accepted; the foreign minister, Abbas Araghchi, said passage would be allowed for two weeks under the management of the Iranian military.

Brent fell as much as 17.2 per cent intraday and gave back part of the move. Wall Street recorded its biggest single-day rally in a year. Reuters reported that investors had placed a combined $950 million bet on oil prices falling only hours before the announcement was made, which is the sort of detail that gets quoted afterwards and is hard to verify in advance.

The truce was fragile within hours

The two-week arrangement was being tested almost immediately. Israel launched its heaviest wave of bombardment of Lebanon so far, and Iran said those attacks breached the ceasefire while Israel said its offensive on Iranian-backed forces was not covered by it. Reports of an attack on the east-west pipeline in Saudi Arabia, which lets exports bypass the strait, also pushed prices back up off the lows.

The scale of the move should be read against the preceding weeks rather than against the pre-war price. Brent had been marching toward an intraday high of almost $120 a barrel. It ended April 8 near $94 — a fall of roughly a fifth from the peak in a session, and still about 30 per cent above the sub-$73 level at which it traded before the war began.

The market's own read, offered at the time by Kathleen Brooks, a research director at the trading platform XTB quoted by The Guardian, was conditional: only a complete walk-out from the ceasefire and a resumption of bombing would push Brent back above $110 and drag stocks and bonds lower with it. Everything in between was treated as noise around a deadline rather than a resolution.