Oil prices experienced a significant decline, reaching a one-week low in the wake of President Trump’s announcement regarding a ceasefire agreement between Iran and Israel. Brent crude futures experienced a decline of 3.76%, settling at $68.79 per barrel, whereas U.S. West Texas Intermediate crude saw a decrease of 3.94%, reaching $65.46. The announcement of a ceasefire alleviated apprehensions regarding potential supply disruptions, resulting in the dissolution of risk premiums that had been incorporated into crude oil prices. Oil prices experienced a significant decline on Tuesday, reaching their lowest point in over a week, following U.S. President Donald Trump’s announcement of an agreed ceasefire between Iran and Israel. This development alleviated concerns regarding potential supply disruptions in the region.

Brent crude futures experienced a decline of $2.69, representing a 3.76% decrease, settling at $68.79 a barrel as of 0006 GMT. This follows a drop of over 4% earlier in the session, marking the lowest level since June 11. U.S. West Texas Intermediate crude experienced a decline of $2.7, representing a 3.94% drop, settling at $65.46 per barrel. This marked its lowest point since June 9 earlier in the session, reflecting an approximate 6% decrease.

On Monday, Trump declared that Israel and Iran have reached a complete agreement on a ceasefire, noting that Iran will commence the ceasefire immediately, with Israel to follow after a 12-hour period. If both parties uphold tranquility, the hostilities will formally cease after a duration of 24 hours, thereby concluding a 12-day conflict. He stated that a “complete and total” ceasefire will be implemented with the aim of resolving the conflict between the two nations. “With the ceasefire news, we are now witnessing a significant reduction in the risk premium that was previously incorporated into crude oil prices last week,” stated Tony Sycamore, analyst at IG. Iran ranks as OPEC’s third-largest crude producer, and a reduction in tensions would facilitate increased oil exports and mitigate supply disruptions, a significant contributor to the recent surge in oil prices.

Both oil contracts concluded the previous session with a decline exceeding 7%, following a rally that reached five-month highs. This movement was prompted by the U.S. military action against Iran’s nuclear facilities over the weekend, which has heightened concerns regarding the potential escalation of the Israel-Iran conflict. “Technically, the overnight sell-off reinforces a layer of resistance between approximately $78.40 (October 2024 and June 2025 highs) and $80.77 (the year-to-date high). It is evident that a significant and unforeseen disruption to supply would be required for crude oil to breach this layer of resistance,” Sycamore stated.