Oil Prices Plunge After Surprise Ceasefire!
by Adam Israel in FinanceOil prices took a sharp dive on Tuesday, falling to pre-conflict levels following a ceasefire announcement between Iran and Israel. Brent crude dropped 6.1% to $67.14 a barrel, while West Texas Intermediate crude fell 6% to $64.37 a barrel, mirroring prices before the June 13th conflict. The ceasefire, announced by President Trump, appeared fragile as Israel accused Iran of violations, claims Iran denied. Despite this, global markets reacted positively. US stocks surged, with the Dow closing up 507 points. The S&P 500 and Nasdaq also saw significant gains, nearing all-time highs. The CBOE Volatility Index dropped 12%, indicating market calm. Positive sentiment extended to Asia and Europe, with major indexes closing higher. Analysts expressed cautious optimism, with some suggesting the conflict may be over, while others warned of potential volatility if tensions re-escalate. The ceasefire eased concerns about disruptions to global oil supplies, particularly the potential closure of the Strait of Hormuz. Goldman Sachs previously estimated oil prices could exceed $100 a barrel if the strait were blocked. Experts believe the threat of severe economic consequences likely motivated both sides to agree to the ceasefire. Prior to the ceasefire announcement, oil prices had surged following the start of the conflict, reaching a five-month high last week, but experienced a significant drop after Iran's targeted missile strikes on US bases in Qatar.
Tweet
