Sharp Drop in Oil Prices After Announcement of Ceasefire Between Iran and Israel

Global oil markets witnessed a significant decline in prices today, Tuesday, June 24, reaching their lowest levels in over a week following the announcement by US President Donald Trump of a ceasefire agreement between Iran and Israel. This has eased concerns about disruptions to supplies from the Middle East, one of the world's key oil-producing regions.

Brent crude futures fell by 4.04% to settle at $68.59 per barrel, while US West Texas Intermediate crude dropped by 4.10% to $65.70 per barrel, after earlier falling by about 6% to its lowest level since June 9.

This decline came after Trump's statement on Monday that Iran and Israel had reached a "complete" ceasefire agreement, stating that the war between them would end within 24 hours if both parties adhered to the agreement. The military confrontation between the two countries had lasted for 12 days prior to this announcement.

Meanwhile, Priyanka Sachdeva, a senior market analyst at Phillip Nova, commented: "If both parties adhere to the ceasefire as announced, investors may expect oil prices to return to normal." She added: "In the future, the extent of Iran and Israel's commitment to the ceasefire terms will play a pivotal role in determining the direction of oil prices."

Iran is the third-largest crude oil producer within OPEC, and easing tensions is expected to increase its oil exports, potentially contributing to global supply stability, a key factor that had driven prices up in recent days.

It is worth noting that oil prices experienced a more than 7% collapse at the close of trading on Monday, after reaching their highest levels in five months, following the US attack on Iranian nuclear facilities earlier in the week, which raised concerns about escalating regional conflict.