U.S. oil prices tumbled Monday evening following former President Donald Trump’s surprise announcement of a ceasefire agreement between Israel and Iran, effectively ending their 12-day conflict.
West Texas Intermediate (WTI) crude futures for August dropped 4.7% to $64.08 per barrel by 19:36 ET, marking a continued slide from earlier losses. Brent crude also fell sharply, settling 8.3% lower at $70.65 per barrel.
The selloff came after Trump revealed that Iran would initiate a near-immediate ceasefire, with Israel following 12 hours later. The conflict is expected to conclude officially 24 hours after the truce begins. Trump stated that both sides were completing "in progress, final missions" as part of the agreement.
Despite the ceasefire news, oil prices recouped some losses after reports emerged that Israel had carried out limited strikes on Iranian targets post-announcement. However, the market still reacted to the broader de-escalation, which eased concerns about a prolonged Middle East conflict that could disrupt global oil supply.
Earlier, Iran launched a limited missile attack on a U.S. airbase in Qatar, which was seen as a measured retaliation for the U.S. bombing of Iranian nuclear facilities over the weekend. Trump dismissed Iran’s response as a “very weak” move, particularly since no casualties were reported and critical infrastructure like oil tankers in the Strait of Hormuz remained untouched.
Traders interpreted these developments as signs of easing geopolitical risk, pushing crude futures sharply lower. The retreat in oil prices reflects reduced fears of supply disruptions in the Persian Gulf region, a key artery for global energy shipments.
With geopolitical tensions cooling, investor focus now shifts to broader economic signals and potential shifts in global oil demand.