Oil falls to more than one-week low on Trump's announcement of Israel-Iran ceasefire

Oil prices plummeted to their lowest level in more than a week on Tuesday, as US President Donald Trump announced that a ceasefire agreement had been reached between Iran and Israel, easing fears of supply disruptions in the Middle East, a major oil-producing region, UNN reports with reference to Reuters.

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Brent crude futures fell by $2.08, or 2.9%, to $69.40 per barrel around 03:30 GMT (06:30 Kyiv time), after earlier falling by more than 4% and reaching their lowest level since June 11.

US West Texas Intermediate crude fell by $2.03, or 3.0%, to $66.48 per barrel, dropping by 6% to its lowest level since June 9 earlier in the session.

Trump announced on Monday that Israel and Iran had fully agreed to a ceasefire, adding that Iran would immediately begin a ceasefire, followed by Israel in 12 hours. If both sides maintain peace, the war will officially end in 24 hours, concluding the 12-day conflict.

"If the ceasefire holds as announced, investors can expect a return to normalcy in the oil sector," said Priyanka Sachdeva, senior market analyst at Phillip Nova.

"Going forward, the extent to which Israel and Iran adhere to the recently announced ceasefire terms will play a significant role in determining oil prices," Sachdeva said.

Trump said that a "complete and total" ceasefire would take effect with the aim of ending the conflict between the two countries.

"With the news of the ceasefire, we are now seeing the continuation of the risk premium embedded in crude oil prices last week, which has practically evaporated," said Tony Sycamore, an analyst at IG.

Iran is the third-largest crude oil producer in OPEC, and easing tensions will allow it to export more oil and prevent supply disruptions, which has been a major factor in the surge in oil prices in recent days.

Both benchmarks fell by more than 7% in the previous session after rising to five-month highs after the US attacked Iranian nuclear facilities over the weekend, raising fears of an escalation of the Israeli-Iranian conflict.

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Direct US involvement in the war also focused investors' attention on the Strait of Hormuz, a narrow and vital waterway between Iran and Oman in the Middle East Gulf, through which 18 to 19 million barrels of crude oil and fuel pass daily, accounting for almost a fifth of global consumption.

Fears are growing that any disruption to maritime activity through the strait would lead to a sharp rise in prices, possibly to triple digits.

However, traders are now taking a breather from the recent surge in oil prices.

"Technically, the overnight sell-off reinforces a layer of resistance between approximately $78.40 (October 2024 and June 2025 highs) and $80.77 (year-to-date high), and it is clear that crude oil will need something extremely unexpected and detrimental to break through this layer of resistance," Sycamore added.