Oil Tanks as Trump Brokers Ceasefire Between Israel and Iran—Is $60 Next?

Crude oil futures fell on Tuesday, erasing all recent gains as Middle East geopolitical tensions cooled. U.S. President Donald Trump declared a "complete and total" ceasefire between Israel and Iran through his Truth Social account, saying that Iran would start the truce immediately, with Israel joining in after 12 hours. If the two sides maintain restraint, the 12-day conflict will be officially over within 24 hours.

The announcement prompted a swift sell-off in oil prices. Brent crude declined 3.76% to $68.79 a barrel—the lowest since June 11—following a more than 4% decline earlier in the day. West Texas Intermediate (WTI) lost as much as 6% to $65.02, its lowest level since June 9, before ticking up slightly to about $65.54.

No Damage to Oil Infra or Hormuz Blockade
The truce came after a weekend of rising tensions in which the U.S. attacked Iranian nuclear sites, raising fears of a wider war in the region. Tensions, though, did not bleed into key oil-related infrastructure. Tehran generally avoided closing off the Strait of Hormuz, which transports one-fifth of the world's oil. Furthermore, Iran's coordinated attacks on U.S. bases in Qatar caused no casualties, which assisted in keeping oil markets stable.

Market Focus Shifts Back
With geopolitical risk dissipating, analysts explain that focus is once again shifting towards oil market fundamentals. "The risk premium embedded in crude oil during last week is now all but evaporated," IG's Tony Sycamore said.
Even after the short-term jump to $81 per barrel earlier this week, oil is not thought to have the structural support to remain high on account of poor demand and ongoing supply. OPEC+ has continued to assert that supplies worldwide are adequate, even in the event of disruptions from Iran. Trump also urged American energy producers to reduce prices and asked the energy department to move faster on domestic drilling.

Outlook
Technical resistance at $78–$80 holds firm. The experts only state that extreme disruption would drive prices upwards from here. The market is currently looking like it is breathing a sigh of relief—but all eyes continue to be on the sustainability of the ceasefire.
 

Also Read: Want a Tension-Free Retirement? These Mutual Funds Do It All for You