Oil prices fell sharply on Tuesday after Israel announced its acceptance of a ceasefire proposal brokered by U.S. President Donald Trump, easing fears of a prolonged conflict with Iran. The development brought relief to global markets rattled by 12 days of escalating hostilities between the two arch-rivals.
At 08:30 GMT, Brent crude dropped 3.5% to $69.00 per barrel, while U.S. West Texas Intermediate (WTI) also slid 3.5% to $66.10. Analysts attributed the downturn to expectations that oil supply routes—especially through the vital Strait of Hormuz—would remain undisrupted.
“A potential end to the conflict has been welcomed by market participants,” said Lee Hardman, currency analyst at MUFG, noting that Brent has nearly reversed all gains recorded since the fighting began.
Oil prices had briefly surged on Monday amid concerns that Iran might retaliate against a U.S. strike on its nuclear facilities by closing shipping lanes. However, when Iran launched missiles at a U.S. base in Qatar without damaging any oil infrastructure, market sentiment quickly shifted.
Stephen Innes of SPI Asset Management described the Iranian response as “loud enough for headlines, quiet enough not to shake the oil market’s foundations,” leading to the “war premium” being wiped out from crude prices.
In a statement on Tuesday, the Israeli government declared that it had “achieved all objectives” in the campaign against Iran, claiming to have eliminated both nuclear and ballistic threats. It warned, however, that any breach of the ceasefire would be met with a forceful response.
Equity markets reacted positively to the de-escalation. In Asia, Hong Kong’s Hang Seng Index soared by 2.06%, Tokyo’s Nikkei 225 rose by 1.1%, and Shanghai’s Composite gained 1.15%. In Europe, London’s FTSE 100 edged up 0.3%, Paris’ CAC 40 climbed 1.5%, and Frankfurt’s DAX surged 1.8%.
Currency markets also saw a shift, with the U.S. dollar losing ground. Federal Reserve Governor Michelle Bowman hinted at possible interest rate cuts in July if inflation remains steady, adding to downward pressure on the dollar.
Key market indicators as of 08:30 GMT:
- Brent crude: $69.00 (–3.5%)
- WTI crude: $66.10 (–3.5%)
- Nikkei 225: +1.1% (38,790.56 close)
- Hang Seng: +2.06% (24,177.07 close)
- Euro/dollar: $1.1591
- Pound/dollar: $1.3598
As the ceasefire begins to reshape global sentiment, analysts are now closely watching diplomatic developments and energy market stability in the days ahead.
