Oil prices dropped sharply on Tuesday, hitting their lowest levels in more than a week after U.S. President Donald Trump declared that Iran and Israel had agreed to a ceasefire—easing market fears of a prolonged conflict that could disrupt Middle Eastern oil supply.
Brent crude futures fell by $2.69, or 3.76%, to $68.79 per barrel in early trading, marking its lowest point since June 11. Earlier in the session, prices had dipped over 4%. Meanwhile, U.S. West Texas Intermediate (WTI) crude dropped $2.70, or 3.94%, to $65.46 per barrel, after hitting its weakest level since June 9 and registering a near 6% fall.
The sharp decline followed Trump’s announcement on Monday that both Iran and Israel had agreed to a “complete and total” ceasefire after a 12-day military conflict. According to Trump, Iran will initiate the ceasefire immediately, and Israel will follow 12 hours later. If the truce holds, the war will officially conclude within 24 hours.
“With the ceasefire news, we are now seeing a continuation of the risk premium built into crude oil prices last week all but evaporate,” said Tony Sycamore, a market analyst at IG.
The Middle East tension had recently driven oil prices to five-month highs, especially after the U.S. launched airstrikes on Iranian nuclear facilities over the weekend, raising fears of an escalating regional conflict. But the potential resolution to the crisis is now reversing that trend.
Iran, the third-largest crude producer in the OPEC bloc, plays a significant role in global oil supply. As hostilities ease, expectations are rising that Iran could resume oil exports more freely, thereby stabilizing supply chains and pushing prices down.
On Monday, both Brent and WTI crude contracts had already settled over 7% lower after fears of deeper conflict gave way to speculation about a diplomatic resolution.
Sycamore further noted that Monday night’s sell-off in oil futures confirmed a strong resistance zone between $78.40 and $80.77—the price range touched during October 2024 and again in June 2025. “It’s clear that it would take an extremely unexpected and severe disruption in global supply for crude to break through that level now,” he said.
As the market digests the latest developments, traders and analysts will continue to watch the situation closely. A confirmed, long-lasting ceasefire could ease geopolitical risk premiums and usher in a new phase of oil market stability—though much still depends on whether both sides maintain peace beyond the next 24 hours.
