Oil prices significantly dropped in the international market on Tuesday, hitting their lowest levels in over a week, after US President Donald Trump announced a ceasefire agreement between Iran and Israel.
Brent crude futures dropped by $2.69, or 3.76 per cent, to $68.79 a barrel as of 0006 GMT. Earlier in the session, prices had fallen more than 4 per cent, touching their lowest since June 11.
Similarly, US West Texas Intermediate (WTI) crude fell $2.70, or 3.94 per cent, to $65.46 a barrel. It had earlier slid nearly 6 per cent, hitting its weakest level since June 9.
President Trump said on Monday that both Iran and Israel had agreed to a full ceasefire to end the 12-day conflict. Iran would begin observing the truce immediately, while Israel would follow suit 12 hours later. If the peace holds, the war will officially conclude within 24 hours, he added.
“The announcement of a ceasefire has caused the risk premium that was priced into crude markets last week to largely disappear,” said Tony Sycamore, analyst at IG.
Iran, the third-largest oil producer in the Organisation of the Petroleum Exporting Countries (OPEC), plays a significant role in global oil markets. Reduced tensions could pave the way for increased Iranian oil exports, easing concerns over potential supply shortages.
Oil prices had rallied to five-month highs in recent days after the US launched strikes on Iranian nuclear facilities, raising fears of a broader regional conflict.
