Oil prices fell to their lowest levels in two weeks on Tuesday following Israel’s acceptance of a ceasefire proposal from U.S. President Donald Trump, easing concerns about potential supply disruptions in the Middle East, a key oil-producing region.
As of 06:45 GMT, Brent crude dropped $3.82, or 5.3%, to $67.66 per barrel, while U.S. West Texas Intermediate (WTI) crude declined $3.75, or 5.5%, to $64.76 per barrel.
Israeli Prime Minister Benjamin Netanyahu confirmed the agreement with Iran, stating the ceasefire followed Israel achieving its objectives in neutralizing Tehran’s nuclear and missile capabilities. Trump had earlier announced that Iran would begin the ceasefire immediately, with Israel to follow 12 hours later, marking an official end to the 12-day conflict if peace holds for 24 hours.
Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that if the ceasefire holds, investors may anticipate a normalization in oil markets. “The extent to which both countries comply with the agreement will significantly influence future oil prices,” she said.
Trump described the agreement as a “complete and total” ceasefire aimed at permanently ending hostilities.
IG analyst Tony Sycamore remarked, “With the ceasefire in place, the geopolitical risk premium built into crude prices last week is now rapidly fading.”
As the third-largest producer in OPEC, Iran’s ability to export without disruption could stabilize supply, removing a key driver behind the recent price surge. Oil prices had surged to five-month highs after U.S. airstrikes on Iranian nuclear facilities over the weekend raised fears of a wider conflict.
Heightened investor attention had turned to the Strait of Hormuz — a strategic chokepoint between Iran and Oman — through which nearly one-fifth of the world’s crude supply transits. A blockage there would likely trigger a dramatic spike in prices.
However, with the situation de-escalating, markets were taking a breather. “The recent sell-off reinforces a key resistance zone between roughly $78.40 and $80.77,” Sycamore added, “and breaking above that would now require a truly unexpected and severe supply disruption.”
