Oil Prices Plunge After Trump Announces Ceasefire Between Iran and Israel

Oil prices declined significantly following U.S. President Donald Trump’s announcement of a comprehensive ceasefire agreement between Iran and Israel, sparking volatility across global energy markets.

Contents

Brent
Oil
Gold

Brent

Sharp Decline in Brent Crude Following De-escalation

Asian markets saw a notable drop in Brent crude prices this morning, with the benchmark falling nearly 5% to around $68 per barrel before recovering some of the losses. This came after a highly volatile session the previous day, which ended with significant losses due to geopolitical concerns stemming from the escalating conflict between Iran and Israel.

Donald Trump confirmed on his “Truth Social” platform that the ceasefire would take effect at midnight New York time, noting that both sides had agreed to the truce. Meanwhile, Iranian Foreign Minister Abbas Araghchi stated that Iran would adhere to the ceasefire as long as Israeli strikes stopped.

Oil

Markets Await Supply Stability After Crisis Eases

The crisis raised fears of a disruption in oil supply from the Middle East, a region responsible for about one-third of global crude production. However, shipping through the Strait of Hormuz continued with only minor disturbances, helping to ease tensions in the energy market.

Analysts noted that the reduced likelihood of a prolonged conflict involving the United States has led to a reassessment of geopolitical risk premiums. Although Brent crude remains in a bullish trading pattern, the immediate spread between contracts dropped from $1.77 to 89 cents per barrel.

Impact of the Ceasefire on OPEC+ Policies and Global Production

This shift has refocused traders’ attention on market fundamentals, especially amid expectations that supply will exceed demand in the second half of the year. The OPEC+ alliance is expected to increase production by around 400,000 barrels per day, as part of efforts to reclaim market share.

Trump Pushes for Cheaper Energy to Support the Economy

Trump continues to advocate for lower oil prices to stimulate the U.S. economy. Following the U.S. airstrikes on Iranian nuclear facilities, he called on the Department of Energy to boost domestic production and expressed his intent to end the conflict in order to stabilize energy prices.

Gold

Gold and Dollar Decline After Tensions Ease

The effects of the ceasefire extended beyond oil, with gold dropping by 0.5% to $3,353.02 per ounce. The Bloomberg Dollar Spot Index also fell by 0.2%. This reflects a decrease in demand for safe-haven assets as geopolitical tensions eased.

Market Outlook: Further Declines or Stability?

With political tensions easing and production expected to increase, some experts believe oil prices could once again test the lower bound of the previous range, between $60 and $65 per barrel in the coming months, especially with rising inventories and declining global demand.

Oil Prices Plunge After Trump Announces Ceasefire Between Iran and Israel

Oil Prices Plunge After Trump Announces Ceasefire

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