Oil prices drop to one-week low as Trump announces Israel–Iran ceasefire

Oil prices plunged to over one-week lows on Tuesday after US President Donald Trump declared that Iran and Israel had agreed to a ceasefire, easing fears of prolonged conflict and potential disruptions to oil supplies in the West Asia. As per Reuters, Brent crude futures dropped $2.69, or 3.76 per cent, to $68.79 a barrel as of 0006 GMT. Earlier in the session, prices fell more than 4 per cent to their lowest since June 11.

Meanwhile, US West Texas Intermediate (WTI) crude fell $2.70, or 3.94 per cent, to $65.46 per barrel—its weakest since June 9—after sliding nearly 6 per cent earlier in the day.

Trump confirms ceasefire timeline

President Trump announced on Monday that both sides had reached a “complete and total” ceasefire. As quoted by Reuters, Iran is to begin the ceasefire immediately, with Israel following after 12 hours. If peace holds, the war, now 12 days old, will officially end within 24 hours.

The truce comes days after the US carried out strikes on Iranian nuclear facilities, a move that had pushed oil prices to five-month highs and triggered fears of broader regional escalation.

Oil market sheds war premium

Tony Sycamore, market analyst at IG, told Reuters, “The risk premium built into crude oil last week has all but evaporated.” Traders appear to be unwinding positions that had been built up on the expectation of wider conflict and potential supply shocks.

Iran is OPEC’s third-largest crude oil producer, and an easing of hostilities is expected to facilitate the resumption of its oil exports. This is a key factor behind the pullback in oil prices, which had surged in recent sessions on fears of supply disruptions.

Resistance levels cap recovery

Despite the decline, analysts say oil prices may still face strong technical resistance. Sycamore added that the recent sell-off reinforces a price ceiling between $78.40, marking the highs of October 2024 and June 2025 and $80.77, the current year-to-date high.

According to Reuters, both Brent and WTI benchmarks had rallied more than 7 per cent in the previous session before reversing gains following Trump’s ceasefire announcement. As markets digest the truce, attention now turns to its implementation and durability. A stable ceasefire could allow Iranian oil to flow more freely, bringing relief to importers and potentially easing inflationary pressures globally.

(With inputs from the agencies)