Oil prices sank more than five percent Tuesday after Israel said it had agreed to US President Donald Trump's proposal for a bilateral ceasefire with Iran.
Brent crude futures fell $3.53 or 4.94% to $67.95 a barrel as of 12:17 pm IST, after falling more than 4% earlier in the session and touching its lowest level since June 11.
U.S. West Texas Intermediate crude slumped $3.48, or 5.08%, to $65.03 per barrel, having hit its weakest level since June 9 earlier in the session and falling around 6%.
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.
He 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.
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 U.S. attacked Iran's nuclear facilities over the weekend, stoking fears of a broadening in 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), 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.
Source Name : Economic Times