Global Oil Prices Drop Sharply After Ceasefire Announcement Between Iran and Israel
Crude oil prices fell significantly on Tuesday, reaching their lowest levels in over a week, after U.S. President Donald Trump announced a ceasefire agreement between Iran and Israel. The news helped ease investor concerns about potential disruptions to oil supplies from the Middle East, a region critical to global energy production.
At around 3:30 a.m. GMT, Brent crude futures dropped by $2.08 (2.9%), trading at $69.40 per barrel. Earlier in the session, Brent prices had plunged over 4%, hitting their lowest since June 11. Similarly, U.S. West Texas Intermediate (WTI) crude declined by $2.03 (3.0%) to $66.48 per barrel, after earlier dropping 6% to a low not seen since June 9.
Ceasefire Brings Relief to Global Oil Markets
President Trump’s announcement revealed that Iran will begin the ceasefire immediately, while Israel will follow 12 hours later. If both nations hold the truce, the conflict lasting 12 days will officially end within 24 hours. The news significantly reduced fears of further military escalation in the Middle East.
Iran, which is OPEC’s third-largest crude oil producer, plays a vital role in the global oil supply chain. Any conflict involving Iran has the potential to restrict oil exports, thereby pushing prices higher. With tensions easing, markets are now anticipating more stable oil exports from Iran, which has contributed to the sudden drop in oil prices.
Market Reaction to U.S. Military Involvement
Just a day before the ceasefire news, crude prices had surged to five-month highs following U.S. airstrikes on Iranian nuclear facilities, sparking worries of a broader war in the region. However, prices reversed sharply as the likelihood of peace increased.
Investors were particularly concerned about the Strait of Hormuz, a narrow and strategic shipping lane between Iran and Oman, through which 18 to 19 million barrels of crude oil and fuels pass daily nearly 20% of global consumption. Any disruption in this channel could have severe implications on global energy supplies.
Resistance Levels May Limit Future Gains
Market analysts suggest that unless there is another major disruption to supply, oil prices may face strong resistance in the near term. According to technical expert Sycamore, the sharp overnight decline highlights a strong resistance range between $78.40 and $80.77 levels that reflect highs seen in October 2024 and June 2025.
“It would take a highly unexpected and significant event to push crude oil prices above this resistance zone,” Sycamore added, suggesting that the current trend favors price consolidation or even further declines in the short term.
The rapid drop in oil prices reflects how sensitive global markets are to geopolitical developments, especially in energy-rich regions like the Middle East. While the ceasefire offers short-term relief, traders and analysts will continue to watch the situation closely for any signs of renewed conflict or unexpected disruptions to global oil supply.
Disclaimer: This article is for informational and educational purposes only. Please consult a professional financial advisor before making any investment decisions.
