Crude oil prices sank to $66 a barrel on Tuesday after US President Donald Trump announced an Iran-Israel ceasefire, despite lingering doubts about its durability.
Benchmark Brent crude traded around $66.21 per barrel by late Tuesday evening. Prices had surged to $79 a barrel on Sunday following the US bombing of Iranian nuclear facilities but the volatile commodity gave up all gains after Tehran’s muted response.
Iran’s missiles at the US military base in Qatar on Monday night were neutralised, causing no casualties, and appeared to be aimed at winding down the conflict rather than escalating it. “I want to thank Iran for giving us early notice, which made it possible for no lives to be lost, and nobody to be injured. Perhaps Iran can now proceed to peace and harmony in the region and I will enthusiastically encourage Israel to do the same,” Trump wrote in a social media post, ahead of announcing a ceasefire.
Industry executives expect prices to ease as the ceasefire takes hold and the global supply-demand balance favours lower prices. “The geopolitical premium is fading. Prices should now be guided primarily by supply and demand,” said an executive, adding that increased OPEC+ production and weaker demand growth projections would drive prices down.
For days, markets feared an aggressive Iranian retaliation that could disrupt energy flows from the Gulf, especially through the Strait of Hormuz, which handles about 30 per cent of global oil trade and 20 per cent of LNG shipments.
Yet those fears proved unfounded as Iran refrained from attacking any oil tankers, opting instead for intermittent missile strikes, first on Israel for nearly a week and then on a US military base in Qatar on Monday night.
