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Oil prices plunged by almost 15% after Donald Trump held off on his threat to bomb Iran into the stone ages on Tuesday night, and Iran’s foreign minister said passage through the strait of Hormuz would be allowed for the next two weeks under the management of its military.

Posting to Truth Social, with just over an hour until his deadline was due to pass, the US president said he was holding off on threatened attacks on Iran’s bridges, power plants and other civilian targets, subject to Tehran agreeing to a two-week ceasefire and reopening of the strait of Hormuz.

Soon after, Iran’s national security council confirmed it had accepted a two-week ceasefire if attacks against Iran were halted. Tehran said peace negotiations with the US would begin in Islamabad on Friday.

Although Tuesday’s news was immediately embraced by markets, the outcome of the US-Iran talks is far from certain, and how the strait will be reopened and managed beyond the two-week grace period is yet to be determined.

Brent crude oil, the international standard, dropped 14.4% to $93.48, and futures for US crude oil sank 14.7% to $96.27 a barrel. The prices remain well above where it was at the start of the war.

Meanwhile as trading in Asia got under way, Australia’s S&P/ASX 200 was up almost 3%, Japan’s Nikkei rose more than 4% and South Korea’s Kospi gained 6%.

In the bond market, Treasury yields eased on word of a potential ceasefire. The yield on the 10-year Treasury fell to 4.24% from 4.30% earlier Tuesday.

Earlier, US stocks swung sharply during regular trading as uncertainty about the war with Iran increased after Trump had threatened a “whole civilization will die tonight, never to be brought back again” if Iran did not meet his 8pm ET deadline.

The S+P 500 fell as much as 1.2% but stocks rallied at the end of trading after Pakistan’s prime minister urged Trump to extend his deadline for another two weeks and asked Iran to open up the strait for the same amount of time.

Oil prices have surged since the US and Israel struck Iran at the end of February, unleashing a conflict that has run for more than five weeks. Tehran has largely closed the strait, through which a fifth of global oil and liquefied natural gas is transported, causing an global energy crunch.

With Associated Press