Oil Prices Drop to Two-Week Lows as Israel Agrees to U.S.-Brokered Ceasefire Proposal

Global oil prices slid to their lowest levels in two weeks on Tuesday, as easing geopolitical tensions between Israel and Iran calmed investor concerns over potential supply disruptions from the Middle East. Brent crude futures fell by $2.48, or 3.5%, to $69 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped $2.37, also down 3.5%, to $66.14. Earlier in the day, both benchmarks had fallen by as much as 5% following the announcement of a ceasefire agreement proposed by U.S. President Donald Trump.

The agreement, which aims to halt hostilities between Israel and Iran, was accepted by Israel after what Prime Minister Benjamin Netanyahu described as the successful elimination of Tehran’s nuclear and ballistic missile threat. The announcement marked a significant de-escalation after nearly two weeks of intense conflict.

The 12-day war had created substantial volatility in global oil markets. On Monday, Brent crude swung within a $10 range—the widest since July 2022—reflecting heightened concerns over regional instability and its potential to disrupt oil flows, particularly through the strategically critical Strait of Hormuz.

President Trump declared that a "complete and total" ceasefire would come into effect, aimed at ending the direct confrontation between Israel and Iran. However, uncertainty remains over the durability of the truce. Israel has reportedly retained orders for military action following an alleged Iranian missile launch—a claim Tehran has denied, asserting it has not violated the ceasefire terms.

Before the ceasefire announcement, both Brent and WTI crude had surged to five-month highs after the United States launched airstrikes targeting Iranian nuclear infrastructure over the weekend. The escalation had drawn attention to the Strait of Hormuz, a key maritime chokepoint between Iran and Oman. Roughly 18 to 19 million barrels per day of oil and fuel—nearly 20% of global consumption—pass through the strait, making it one of the world’s most vital energy corridors.