After two weeks of rising tensions and surging energy costs, oil prices plunged on Tuesday as Israel agreed to a ceasefire with Iran. The price of Brent crude, a key international benchmark, tumbled below $67 per barrel before rebounding slightly later in the day. Investors welcomed signs of de-escalation, especially after US President Donald Trump announced the ceasefire on social media and urged Israel to hold back from further military action.
The truce follows intense concern that Iran could shut down the Strait of Hormuz, a critical oil shipping route, amid retaliatory attacks. Trump posted that the ceasefire was “now in effect,” and Israel soon confirmed its agreement, helping restore calm to volatile markets. The decision marks a dramatic shift after oil spiked as high as $81 per barrel during the missile exchanges, igniting fears over rising petrol and energy bills.
Oil Prices Stabilise After Wild Swings
Following the ceasefire announcement, oil prices began to stabilise across markets. Priyanka Sachdeva, senior analyst at Phillip Nova, noted that “if the ceasefire is followed as announced, investors might expect the return to normalcy in oil.” However, she cautioned that sustained peace would be essential, stating, “the extent to which Israel and Iran adhere to the recently announced ceasefire conditions will play a significant role in determining oil prices.”
Despite some recovery, Brent crude closed at $67.68—still below levels from before Israel’s strikes on Iran’s nuclear facilities began on June 13. The market’s reaction highlights ongoing fragility and investor uncertainty over future geopolitical flare-ups.
Markets React As Global Energy Fear Recedes
Global stock markets responded positively as oil prices cooled. The S&P 500, Dow Jones, and Nasdaq each climbed over 1%, while Germany’s DAX jumped 1.6%. The FTSE 100 held flat. In Asia, Japan’s Nikkei rose 1.1%. Meanwhile, wholesale UK gas prices fell by 17% after surging earlier, reflecting renewed optimism about energy stability. Still, tension remains after Israel accused Iran of breaching the ceasefire with another missile strike.
Energy experts warn that further escalations could reverse gains, especially with the Gulf’s vital role in oil and gas transport. For now, though, markets appear cautiously optimistic that this fragile ceasefire will hold.