Oil prices tumbled during Asian trade on Tuesday, retreating to their lowest levels in more than a week after United States President Donald Trump announced a ceasefire agreement between Israel and Iran, easing fears of a prolonged conflict in the oil-rich Middle East.
By 2:40 pm AEST (4:40 am GMT), Brent crude futures had fallen $1.82, or 2.6%, to $69.68 per barrel, while US West Texas Intermediate (WTI) crude declined $1.81, or 2.6%, to $66.70 per barrel.
Trump said on Monday that Iran and Israel had agreed to a ceasefire arrangement; Tehran reportedly launched its final wave of missiles at Israel early Tuesday before the ceasefire took effect, following multiple Iranian strikes that killed four and injured at least 20 in Beersheba.
Iran, a key OPEC member and the third-largest crude producer in the cartel, is expected to ramp up exports if tensions continue to ease, alleviating fears about supply constraints that drive oil prices higher in recent days.
Brent and WTI contracts settled more than 7% lower in the prior session, following a sharp rally to five-month highs.
The surge came after the U.S. launched airstrikes on Iranian nuclear sites over the weekend, raising fears of a broader war that could disrupt global oil flows.
Attention turned to the Strait of Hormuz, a strategic maritime chokepoint between Iran and Oman through which nearly a fifth of the world’s oil supply passes - around 18 to 19 million barrels per day.
