Oil Prices Plunge After Iran-Israel Ceasefire: Is This the End of the Crisis?

2025-06-25 00:02:18.96

Oil prices fell sharply on Tuesday, returning to levels seen before the Iran-Israel conflict, as investors reacted positively to a ceasefire agreement. Brent crude dropped 6.1% to $67.14 a barrel, and West Texas Intermediate crude fell 6% to $64.37 a barrel. These prices are similar to those before Israel's attack on Iranian nuclear facilities on June 13th. The 12-day conflict involved missile exchanges and US military involvement. President Trump announced the ceasefire, but hours later, Israel accused Iran of violating it, a claim Iran denied. Despite initial concerns, the ceasefire appeared to hold by Tuesday afternoon. Global markets also saw positive reactions, with US stocks closing higher, the S&P 500 and Nasdaq nearing all-time highs, and the CBOE Volatility Index decreasing. Asian and European markets also experienced gains. Analysts offered mixed perspectives. Mizuho Securities' Robert Yawger suggested the conflict may be over, while FXTM's Lukman Otunuga cautioned about the ceasefire's fragility and potential for renewed tensions. The ceasefire reduces concerns about oil supply disruptions, especially the possibility of Iran closing the Strait of Hormuz. Goldman Sachs estimated that an extended disruption could push oil prices above $100 a barrel. Rystad Energy's Mukesh Sahdev suggested that Brent crude could remain near $70 a barrel, pending clarity on a US-Iran deal. The sharp drop in oil prices follows a significant increase after the conflict began, reaching a five-month high last week before falling 7.2% on Monday after Iran's missile strikes on US bases in Qatar.