Oil prices plunge after Donald Trump's ceasefire announcement in major reprieve for Britons

Meanwhile, the cost of benchmark Brent crude dipped by 15.9 per cent to $92.30 per barrel.

On his Truth Social platform, Mr Trump declared: "Subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks."

The President insisted the agreement was a "double sided ceasefire".

He added: "We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate.

"Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the agreement to be finalised and consummated."

The closure of the Strait of Hormuz has wreaked havoc on global markets since the conflict erupted on February 28.

Around 20 per cent of the world's petroleum and 25 per cent of liquefied natural gas flows through the critical waterway.

The checkpoint in the Gulf typically sees around 20.3 million barrels of petroleum and crude oil every day.

The Islamic Republic has confirmed it will allow ships to pass through safely - for a fee - for the duration of the ceasefire period.

In a statement, Iranian Foreign Minister Abbas Araghchi said: "For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran's Armed Forces and with due consideration of technical limitations."

However, Iran's Supreme Security Council has warned: "Our fingers are on the trigger, and as soon as the enemy makes the slightest mistake, it will be answered with full force."

The price of oil remains higher than before the conflict began.

And on Tuesday, RAC data revealed petrol prices had jumped 3p per litre in the last five days alone, to 157.02p, which is already 24p higher than before the start of the war in Iran.

Diesel drivers are struggling even more, with prices skyrocketing from a relatively low level of 142.38p at the end of February to 189.42p yesterday.

The insurance firm had said diesel looked set to go through the 190p-a-litre mark on Wednesday - though Mr Trump's words have already sent prices down.

Andrew Lilley, chief rates strategist at Australia-based investment firm Barrenjoey, warned there was still a “long way to get back to where we were before this began”.

He added: "The worry now is the markets are unsure of the extent to which the oil price is going to get back to $75.

"This little precipice where actually oil is flowing, no one has a shortage, but it stays at an equilibrium price of $90, that is actually where you remove the tail risk that central banks are cutting.

"It's kind of the scenario that results in permanently high yields because we're going to have damaged infrastructure and a sticky high oil price for months to come, which means that we are going to get higher inflation."

Meanwhile, Annex Wealth Management chief economist Brian Jacobsen said the President's move was "enough to keep hopes alive that not only will an entire civilisation not be destroyed, but we could see oil start flowing through the Strait of Hormuz".

He added: "Is it just kicking the can down the road, moving the goal posts, 'Taco Tuesday', or whatever metaphor we'd like, to only to have tempers flare and bombs drop again? Who knows?

"But it's good enough for now to elicit a positive response from the markets."

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