Oil tumbles to over one-week lows as Trump announces Israel-Iran ceasefire
SINGAPORE: Oil prices fell sharply to their lowest in more than a week on Tuesday as US President Donald Trump said a ceasefire has been agreed between Iran and Israel, alleviating worries of supply disruptions in the Middle East - a major oil-producing region.
Brent crude futures were down $2.08, or 2.9%, at $69.40 a barrel around 0330 GMT, after earlier tumbling more than 4% and touching its lowest level since June 11.
US West Texas Intermediate crude declined $2.03, or 3.0%, to $66.48 per barrel, having dived 6% to its weakest level since June 9 earlier in the session.
Trump announced on Monday that Israel and Iran have fully agreed to a ceasefire, adding that Iran will begin the ceasefire immediately, followed by Israel after 12 hours.
If both sides maintain peace, the war will officially end after 24 hours, concluding a 12-day conflict.
'If the ceasefire is followed as announced, investors might expect the return to normalcy in oil,' said Priyanka Sachdeva, senior market analyst at Phillip Nova.
'Moving forward, the extent to which Israel and Iran adhere to the recently announced ceasefire conditions will play a significant role in determining oil prices,' Sachdeva said.
Trump said that a 'complete and total' ceasefire will go into force with a view to ending the conflict between the two nations.
'With the ceasefire news we are now seeing a continuation of the risk premium built into crude oil price last week all but evaporate,' said Tony Sycamore, analyst at IG.
Oil falls 6pc
Iran is OPEC's third-largest crude producer, and the easing of tensions would allow it to export more oil and prevent supply disruptions, a major factor in oil prices jumping in recent days.
Both the oil contracts settled over 7% lower in the previous session after rallying to five-month-highs after the US attacked Iran's nuclear facilities over the weekend, stoking fears of a broadening in the Israel-Iran conflict.
The direct US involvement in the war had also focused investor squarely on the Strait of Hormuz, a narrow and vital waterway between Iran and Oman in the Mideast Gulf through which between 18 and 19 million barrels per day of crude oil and fuels flow, nearly a fifth of the world's consumption.
Concerns were growing that any disruption to maritime activity through the strait would catapult prices, possibly into three-digit territory. For now, however, traders were catching their breath from the recent oil price spike.
'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), and it's clear that it will take something extremely unexpected and detrimental to supply for crude oil to break through this layer of resistance,' Sycamore added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
34 minutes ago
- Express Tribune
Iraq to investigate drone attacks on military radar systems
Listen to article Iraq said on Tuesday it will investigate suicide drone attacks on radar systems at two military bases, adding that its forces intercepted several other attempted incursions. There has been no claim of responsibility for the attacks, and the government has not yet identified any perpetrators. Sabah al-Numan, the military spokesman for the Iraqi prime minister, described the attacks as "cowardly and treacherous". He said that early Tuesday "several small suicide drones targeted multiple Iraqi military sites and bases." "The assault severely damaged radar systems at Camp Taji, north of Baghdad, and Imam Ali Base in Dhi Qar Province" in southern Iraq, he added. Iraqi forces also thwarted other attacks against "four additional sites across various locations", Numan said, adding that the drones were downed "before they could reach their intended targets". Prime Minister Mohammed Shia al-Sudani ordered the formation of "a high-level" committee to investigate the attacks and identify the perpetrators. Earlier, a security source told AFP requesting anonymity that the first attack hit a radar system at the Taji base, and a few hours later another drone struck the radars at the Imam Ali airbase in Dhi Qar. A drone fell in the Radwaniya district, 10 kilometres west of Baghdad International Airport, the source said, where US troops are deployed in a base as part of an anti-jihadist coalition. The unidentified drone strikes came hours after Iran launched missiles at a US military facility in Qatar in retaliation for the US bombing of Tehran's nuclear facilities. Following the Qatar attack, Israel said it had agreed to US President Donald Trump's proposal for a ceasefire, and Baghdad announced the reopening of its airspace, 12 days after closing it amid the Iran-Israel war. Security sources who confirmed the drone attacks to AFP could not name any perpetrators. A source close to the Iran-backed Iraqi factions, who had in previous years hit bases hosting US troops, told AFP "of course" the groups have nothing to do with the drone attacks. Another source from the factions suggested Israel and the US might be behind them. A senior security official said "we don't know yet if the drones were launched from inside or outside Iraq". Iraq, which has for years navigated a delicate balancing act between its allies Tehran and Washington, has long been a fertile ground for proxy battles. Since the start of the Iran-Israel war, Baghdad has worked to prevent the violence from spreading onto its turf, especially due to growing fears over possible intervention by Iran-backed armed factions, who have threatened Washington's interests should it join Israel's campaign. Iraq has only recently regained a semblance of stability after decades of devastating conflicts and turmoil.
Business Recorder
41 minutes ago
- Business Recorder
Trump says Iran-Israel truce holds after berating both countries
WASHINGTON: US President Donald Trump said Tuesday that a ceasefire between Iran and Israel was holding, shortly after he lashed out at both countries and cursed as he accused them of violating the truce. In a fast-moving series of declarations, the 79-year-old Republican, who was on his way to attend a NATO summit in The Hague, posted on his Truth Social app that 'the Ceasefire is in effect!' 'ISRAEL is not going to attack Iran. All planes will turn around and head home, while doing a friendly 'Plane Wave' to Iran. Nobody will be hurt,' Trump wrote. Minutes earlier, he had castigated Iran and also close US ally Israel for violating a ceasefire he had originally announced late Monday. Trump says Iran-Israel ceasefire in force The two countries have been 'fighting so long and so hard that they don't know what the fuck they're doing, do you understand that?' the president told reporters at the White House. Iran violated the ceasefire, 'but Israel violated it too,' Trump told reporters on the White House's South Lawn as he departed for the NATO summit. 'So I'm not happy with them. I'm not happy with Iran either. But I'm really unhappy if Israel is going out this morning.' 'I've got to get Israel to calm down,' he said. 'Israel, as soon as we made the deal, they came out and dropped a load of bombs the likes of which I've never seen before.' Trump's unusually public display of anger at Israel saw the US leader apparently trying to cajole his ally to call off warplanes in real time. Earlier the same morning, he had posted on Truth Social: 'ISRAEL. DO NOT DROP THOSE BOMBS' – without it being clear which bombs he was referring to. 'IF YOU DO IT IS A MAJOR VIOLATION. BRING YOUR PILOTS HOME, NOW!' If it holds, the truce would be a big political win for Trump in the wake of his risky decision to send US bombers over the weekend to attack three nuclear facilities in Iran that Israel and the United States say were being used to build an atomic bomb in secret. The US leader had said the truce would be a phased 24-hour process beginning at around 0400 GMT Tuesday, with Iran unilaterally halting all operations first. He said Israel would follow suit 12 hours later. Israel has been bombing Iran in an offensive that began June 13. The United States joined the attack with a mission starting overnight Friday to Saturday against the deeply buried Fordow complex and two other sites. Speaking to reporters at the White House, Trump insisted that the US bombing mission was a success. 'I think it's been completely demolished,' he said, savaging US journalists for 'fake news' and calling two networks 'scum' for reporting that it remains unclear whether the Iranian nuclear infrastructure was truly dismantled. 'IRAN WILL NEVER REBUILD THEIR NUCLEAR FACILITIES!' he posted separately on Truth Social.
Business Recorder
an hour ago
- Business Recorder
US Fed chair to signal no rush for rate cuts despite Trump pressure
WASHINGTON: US Federal Reserve Chair Jerome Powell will tell Congress Tuesday that the central bank can afford to wait for the impact of tariffs before deciding on further interest rate cuts – despite President Donald Trump's calls to do so. The Fed has a duty to prevent a one-time spike in prices from becoming an 'ongoing inflation problem,' Powell said in prepared remarks to the House Committee on Financial Services. 'For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' he added. Powell's reiteration that the Fed can wait to lower rates comes after two Fed officials recently expressed openness to cuts as early as in July. Fed's Bowman open to cutting rates at July policy meeting The Fed has held the benchmark lending rate steady this year after its last cut in December, bringing the level to a range between 4.25 percent and 4.50 percent. After unveiling the Fed's latest announcement to keep rates unchanged for a fourth straight policy meeting last week, Powell told reporters that the bank would make smarter decisions if it waited to understand how Trump's tariffs impact the economy. But hours before Powell's testimony Tuesday, Trump again urged the Fed chair to slash rates, saying these should be 'at least two to three points lower' given that inflation data remains benign. 'I hope Congress really works this very dumb, hardheaded person, over,' Trump wrote on his Truth Social platform. On Tuesday, Powell is expected to maintain that it remains unclear how concerns over US trade policies could affect future spending and investment. 'Increases in tariffs this year are likely to push up prices and weigh on economic activity,' he said in the prepared remarks. For now, Powell added: 'Despite elevated uncertainty, the economy is in a solid position.'
