Oil prices sink 6% as Trump touts Israel-Iran ceasefire deal, supply worries ease
West Texas Intermediate (CL=F) fell over 6% to trade nearat $64.37 per barrel, while Brent crude (BZ=F), the international benchmark, also tumbled to hover above $67.14 per barrel.
Crude futures took a leg lower after Trump wrote on social media : "China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the U.S., also. It was my Great Honor to make this happen!'
The comment was seen as a reversal of his stance in May when the President threatened 'secondary sanctions' against importers of Iranian oil.
Earlier on Tuesday Trump attempted to keep both countries in line with a timeline on a ceasefire agreement he announced on Monday evening.
"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, the Ceasefire is in effect!" wrote Trump.
Oil settled 7% lower on Monday after Iran launched missile attacks on a US air base in Qatar, retaliating against Washington's strikes on three Iranian nuclear sites over the weekend.
Prices further weakened after Trump hinted Iran's retaliation had been telegraphed, thanking Tehran for "giving us early notice."
"Iran's response appears to have been more symbolic than escalatory — targeting US military bases but avoiding any loss of life or damage to energy structure," Rebecca Babin, senior energy trader at CIBC Private Wealth, told Yahoo Finance on Monday afternoon.
Prior to the retaliatory move, Wall Street weighed various scenarios in the wake of the initial US strikes, including the threat of Iran closing the Strait of Hormuz, a critical chokepoint for roughly 20% of the world's oil flows.
JPMorgan analysts projected the closure would be a "severe outcome" scenario, in which oil futures could spike to $120 to $130.
"Yet, beyond the short-term spike induced by geopolitics, our base case for oil remains anchored by our supply-demand balance, which shows that the world has enough oil," Natasha Kaneva wrote on Monday morning.
JPMorgan expects oil to trade in the low-to-mid-$60 range for the remainder of 2025, assuming the Middle East risk premium fully dissipates.
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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