On Tuesday oil prices fell as markets responded to news of the Israel-Iran ceasefire, reducing fears of regional supply shocks. Brent crude dropped by $4.34, or 6.1%, settling at $67.14 per barrel, its lowest level since June 10. U.S. West Texas Intermediate (WTI) crude declined, falling $4.14 to $64.37 per barrel.
Both benchmarks had surged in recent weeks due to escalating tensions, peaking near $81 after Israel struck Iranian nuclear sites on June 13. But the sudden truce, though fragile, reversed those gains as traders reassessed geopolitical risks. President Donald Trump announced the ceasefire was “now in effect,” though he soon accused both sides of violating it.
Investors welcomed the truce with cautious optimism, and global stock markets responded positively. The S&P 500 and Dow Jones climbed 0.9%, while the Nasdaq rose over 1%. Germany’s DAX index jumped 1.7% in Europe, and the UK’s FTSE 100 increased by 0.4%. Japan’s Nikkei closed 1.1% higher.
Middle East tensions had sparked fears that Iran might disrupt oil shipments through the Strait of Hormuz. The narrow waterway handles around one-fifth of the world’s oil supply, making it a critical artery for global energy flows.
Analysts said the Israel-Iran ceasefire erased the “geopolitical risk premium” that had driven prices higher. Iran’s retaliatory strike on a U.S. base in Qatar was seen as limited, suggesting both nations may avoid prolonged conflict.
Meanwhile, wholesale UK gas prices plunged 12.5% after spiking during the missile exchanges. Qatar, a key gas exporter, also ships through Hormuz, adding to concerns. Rising output from Kazakhstan and Guyana and soft U.S. consumer confidence weighed further on prices. According to early forecasts, analysts expect U.S. oil stockpiles to drop for a fifth straight week.
