Oil prices tumbled by six per cent this week after a ceasefire agreement between Iran and Israel sharply reduced concerns about potential supply disruptions from the Middle East.
The truce, announced by US President Donald Trump, brought American crude futures to their lowest point in over a week, with Brent and West Texas Intermediate (WTI) crude both falling back to levels seen before the conflict.
The market reaction was swift: Brent crude dropped nearly six per cent to around $66.44 per barrel, while WTI settled at $64.50 per barrel.
Follow us on WhatsApp | LinkedIn for the latest headlines
Other benchmarks like Murban crude was close to $68.89 per barrel, while the OPEC basket crude was about $67.99.
Premium grades such as Nigeria's Bonny Light and Angola's Girassol were higher, trading around $78.62 and $79.56 respectively, though slightly down recently.
This reversal erased all the gains made during the 12-day escalation, when prices had surged on fears that hostilities could threaten oil flows through the vital Strait of Hormuz.
Analysts say the ceasefire has effectively removed the risk premium that had built up during the conflict, and oil prices may fall further if the truce holds. However, they caution that any renewed tensions or violations could quickly send prices higher again.
Amid the recent Israel-Iran conflict, crude oil prices had surged sharply due to fears of supply disruptions in the Middle East.
Brent crude, the global benchmark, climbed from under $70 per barrel before the conflict to a peak of $81-$81.40 per barrel--an increase of about 15 per cent--as hostilities escalated and concerns grew over a potential closure of the Strait of Hormuz, a vital oil shipping route. This marked the highest oil prices in five months, with prices rising over 10 per cent in just under two weeks of tension. The spike reflected market anxiety about possible interruptions to global oil supplies, but prices quickly dropped once a ceasefire was announced and the risk of major supply disruption faded.
