Middle East Ceasefire Eases Oil Prices, Brent and WTI Fall Over 7%

Oil prices experienced a sharp decline of around 3% to over 7% following easing tensions between Iran and Israel, spurred by President Trump's announcement of a temporary ceasefire. Brent crude settled near $69-$71 per barrel, and WTI crude fell below $70, reversing earlier gains driven by fears of supply disruptions and potential closure of the Strait of Hormuz, a critical route for global oil shipments. Market analysts noted that the ceasefire significantly reduced the risk premium embedded in oil prices, with optimism that the conflict de-escalation could lead to more stable energy markets if the truce holds. However, risks remain, especially concerning Iran's potential attempts to close the Strait of Hormuz, which could quickly reignite volatility and push prices higher. The International Energy Agency's emergency stockpiles and US officials' warnings to Iran underscore the ongoing geopolitical sensitivities affecting oil supply. Despite the current relief, the Middle East remains a fragile region with the possibility of renewed tensions impacting global energy markets.