Oil Prices Plunge to $69 as Israel, Iran Agree to Ceasefire
Global crude oil prices have recorded a 3 per cent decline, falling below the $70 per barrel mark, following Israel’s agreement to a ceasefire deal brokered by US President Donald Trump to end hostilities with Iran.
Crude oil prices extended their steep decline as fading tensions in the Middle East lowered geopolitical risk premiums, after US-led B-2 bomber attacks targeted Iran’s nuclear sites at Fordow, Natanz, and Esfahan.
As of 11:30 am on Tuesday, Brent Crude dropped to $69.11 per barrel while WTI Crude fell to $66.55 after the ceasefire announcement.
Israeli Prime Minister Benjamin Netanyahu confirmed the agreement, saying the country had accomplished its strategic goals, including neutralising Iran’s nuclear and ballistic missile threats.
“Israel has achieved all the objectives of Operation Rising Lion — and even more,” Netanyahu said, expressing gratitude to the US for its support and cooperation in dismantling Iran’s nuclear ambitions.
“In light of this achievement, and in full coordination with President Trump, Israel has accepted the president’s proposal for a mutual ceasefire,” he added.
President Trump had earlier announced that the ceasefire between the two longtime adversaries would begin at midnight.
If sustained, the truce would mark the end of a 12-day confrontation triggered by Israeli airstrikes on Iranian nuclear and military targets, which led to retaliatory missile launches from Tehran.
Tensions during the conflict had sent oil prices soaring amid fears of disruptions in the Middle East, which supplies nearly a third of the world’s oil.
However, key oil infrastructure and crucial maritime routes, particularly the Strait of Hormuz, remained unaffected, tempering concerns of severe supply shocks.
Tensions also flared once again after Israel accused Iran of firing a ballistic missile at northern Israel, violating the ceasefire agreement.
The alleged attack has intensified demands from both Israel’s ruling coalition and opposition for swift and decisive retaliation against Iranian regime targets in Tehran.
The General Staff of the Iranian Armed Forces, in a statement broadcast on state media Tuesday, denied reports that it had launched missile strikes following the ceasefire.
This stands in contrast to a claim by the Israel Defence Forces (IDF), which said a ballistic missile was intercepted over northern Israel shortly after the truce was declared.
Despite the apparent ceasefire breach, market analysis by Advisors Reports indicates that the broader crude oil outlook remains bearish. Expectations of rising supply surpassing demand in the year’s second half may result in growing global stockpiles, placing additional downward pressure on prices.
According to industry analysts, crude oil prices are expected to stay weak amid persistent oversupply concerns, unless significant demand-side developments materialise to reverse the trend.
