Crude oil price sinks 7% as Trump calls for a ceasefire between Iran and Israel

Oil prices dropped on Tuesday to their lowest point in over a week after U.S. President Donald Trump announced that Iran and Israel had reached a ceasefire, easing concerns about potential supply disruptions in the region.

Brent crude futures dropped by $2.69, or 3.76%, to $68.79 a barrel as of 0006 GMT, after earlier sliding over 4% and hitting their lowest point since June 11.

Meanwhile, U.S. West Texas Intermediate (WTI) crude fell by $2.70, or 3.94%, to $65.46 a barrel, after earlier tumbling nearly 6% and reaching its lowest level since June 9.

Trump declared on Monday that Israel and Iran have reached a complete agreement on a ceasefire. He stated that Iran would implement the ceasefire immediately, with Israel following 12 hours later.

If both parties uphold the truce, the war—lasting 12 days—will formally conclude after 24 hours. He emphasized that a “complete and total” ceasefire is set to take effect to bring an end to the conflict between the two countries.

Where's oil prices headed?

Both oil contracts plunged over 7 per cent in the previous session, retreating from five-month highs reached after the U.S. struck Iran's nuclear facilities over the weekend, raising concerns of an escalation in the Israel-Iran conflict.

Iran, the third-largest crude oil producer in OPEC, could boost its oil exports and help avoid supply disruptions if tensions ease — a key reason behind the recent spike in oil prices.

"With the ceasefire news we are now seeing a continuation of the risk premium built into crude oil price last week all but evaporate," said Tony Sycamore, analyst at IG, was quoted as saying by Reuters.

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

(With inputs from Reuters)

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