Oil Markets React: Crude Prices Drop Sharply Amid Middle East Ceasefire
Oil prices tumbled to their lowest levels in over a week after US President Donald Trump announced a ceasefire agreement between Iran and Israel, easing fears of supply disruptions in the key oil-producing region.
Key Price Movements: Brent & WTI Crude Decline
Brent crude futures fell 2.9% to $69.40 per barrel, hitting their lowest since June 11.
US West Texas Intermediate (WTI) crude dropped 3% to $66.48, after briefly plunging 6% earlier in the session.
The ceasefire, set to take effect immediately for Iran and within 12 hours for Israel, could mark the end of a 12-day conflict that had threatened Middle East oil supplies.
Why Oil Prices Are Falling
Reduced Supply Risks: Iran, OPEC’s third-largest producer, can resume normal exports if tensions ease.
Strait of Hormuz Concerns Fade: The critical oil shipping chokepoint (handling 20% of global supply) is now less likely to face disruptions.
Market Correction: Prices had surged last week on war fears, but traders are now pricing in stability.
Analyst Insights: What’s Next for Oil?
Priyanka Sachdeva (Phillip Nova): “If the ceasefire holds, oil markets could return to normalcy.”
Tony Sycamore (IG): “The risk premium built into oil prices last week has evaporated with the ceasefire news.”
Technical Outlook: Resistance Levels in Focus
Oil faces strong resistance between $78.40 and $80.77 (2024 highs). Analysts say only a major supply shock could push prices higher now.
