ISLAMABAD (PEN) : Crude oil prices declined significantly in Asian markets Tuesday after Iranian state media reported a ceasefire deal with Israel, easing concerns about potential disruptions to oil supply in the Middle East.
Market Reaction to Ceasefire Announcement
US West Texas Intermediate (WTI) crude fell 2% to $67.13 per barrel, marking its lowest point in nearly two weeks. Meanwhile, Brent crude, the global benchmark, dropped 1.8% to $67.17 per barrel.
The decline followed US President Donald Trump’s late Monday declaration of a “complete and total” ceasefire between Israel and Iran. Trump expressed optimism that the ceasefire would become permanent. Iranian state media subsequently stated that the ceasefire had been “imposed on the enemy.”
Recent Volatility in Oil Prices
Oil prices had already experienced a steep fall on Monday, with WTI crude dropping 7.2% to close at $68.51 per barrel—its largest one-day decrease since early April. Brent crude also closed down 7.2% at $71.48 per barrel, the sharpest daily loss since August 2022.
These sharp drops followed a limited missile attack by Iran on US military bases in Qatar. Just days earlier, prices surged over 10% amid fears that escalating conflict might severely disrupt global oil supply. On Sunday evening, crude briefly climbed to $78.50 per barrel, reaching a five-month high.
Context and Outlook
Prior to the recent fluctuations, US crude had last traded below \$70 per barrel on June 12, shortly before Israeli strikes on Iranian nuclear facilities commenced.
The ceasefire announcement offers a potential easing of geopolitical tensions in the region, providing some relief to energy markets unsettled by fears of wider instability.
