Publication date:
June 24, 2025
Oil Prices Drop as Israel-Iran Ceasefire Announced
Oil prices have fallen sharply following the announcement of a ceasefire between Israel and Iran, reversing gains made since mid-June.
Energy
Oil prices have declined significantly while stock futures rose on Tuesday as tensions in the Middle East eased. President Donald Trump announced that Israel and Iran have agreed to a "complete and total" ceasefire, which Israel later confirmed.
Benchmark US West Texas Intermediate oil futures fell 3.2% to $66.30 a barrel, while international Brent crude oil futures dropped 3.4% to $69.08 a barrel as of early Tuesday morning. These declines have reversed the price gains seen since June 12, the day before Israel struck Iran.
The oil markets are now focused on developments in the Strait of Hormuz, a critical shipping route through which about 20% of global oil trade passes. Any disruption to this waterway could potentially cause prices to rise again.
Analysts at Rystad Energy noted that Iran's strikes on a US airbase in Qatar on Monday, which resulted in no reported casualties, may signal "a possible desire from Iran to de-escalate by inflicting minimal damage to US infrastructure in the region."
However, market observers remain cautious. AJ Bell investment director Russ Mould stated that markets "will be watching closely to see if the cessation in hostilities is maintained and for Iran's next move." Analysts at Deutsche Bank added that while the recent geopolitical shocks have been temporarily disruptive, they have had little lasting effect on markets so far.
The fragile nature of the ceasefire was underscored by ongoing covert operations and missile launches that have already begun to erode its credibility. The situation remains fluid, with both sides using digital platforms to declare restraint while continuing activities that fall short of open warfare.
Market participants will be closely monitoring any developments that could impact oil supply routes or lead to further escalation in the region. The Strait of Hormuz remains a key focus, given its critical importance to global energy markets.
Benchmark US West Texas Intermediate oil futures fell 3.2% to $66.30 a barrel, while international Brent crude oil futures dropped 3.4% to $69.08 a barrel as of early Tuesday morning. These declines have reversed the price gains seen since June 12, the day before Israel struck Iran.
The oil markets are now focused on developments in the Strait of Hormuz, a critical shipping route through which about 20% of global oil trade passes. Any disruption to this waterway could potentially cause prices to rise again.
Analysts at Rystad Energy noted that Iran's strikes on a US airbase in Qatar on Monday, which resulted in no reported casualties, may signal "a possible desire from Iran to de-escalate by inflicting minimal damage to US infrastructure in the region."
However, market observers remain cautious. AJ Bell investment director Russ Mould stated that markets "will be watching closely to see if the cessation in hostilities is maintained and for Iran's next move." Analysts at Deutsche Bank added that while the recent geopolitical shocks have been temporarily disruptive, they have had little lasting effect on markets so far.
The fragile nature of the ceasefire was underscored by ongoing covert operations and missile launches that have already begun to erode its credibility. The situation remains fluid, with both sides using digital platforms to declare restraint while continuing activities that fall short of open warfare.
Market participants will be closely monitoring any developments that could impact oil supply routes or lead to further escalation in the region. The Strait of Hormuz remains a key focus, given its critical importance to global energy markets.
