On Tuesday, June 24, after Israel announced that it had accepted a bilateral ceasefire proposal proposed by U.S. President Donald Trump, potentially ending nearly two weeks of intensifying conflict with Iran, global oil prices fell more than 5%.
As investor concerns about a protracted disruption in the energy market started to subside, crude oil saw a precipitous drop. The war had sparked worries about disruptions to the oil supply, especially through the vital Strait of Hormuz, which serves as a chokepoint for the world’s energy transportation.
The U.S. benchmark West Texas Intermediate (WTI) fell 5.4% to $65.01 per barrel by 06:50 GMT, while Brent crude had dropped 5.2% to $67.75 per barrel.
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“The potential end to the conflict has been welcomed by market participants,” said Lee Hardman, currency analyst at MUFG. “Brent has now almost fully reversed all of the gains since the conflict began.”
Global Oil Price Crashes As Iran-Israel Cease Fire Deal Begins!
The U.S. dollar declined following recent strength driven by geopolitical risk, reflecting the easing tension in currency markets as well. Hardman continued, “We’re likely to see the dollar’s weakening trend resume if Middle East tensions now fade as a driver.”
Fears that Iran might block or disrupt traffic in the Strait of Hormuz in retaliation for a U.S. strike on its nuclear facilities caused oil prices to briefly rise on Monday morning. However, when Iran’s response—a missile strike on a U.S. base in Qatar—left oil infrastructure unaffected, prices fell as much as 7% later in the day.
“Tehran played it cool,” said Stephen Innes, managing partner at SPI Asset Management. “Their retaliation was loud enough for headlines, but quiet enough not to shake the foundations of the oil market. Once that became clear, the war premium came crashing out of crude.”
Market Snapshot as at 07:00 GMT
Brent Crude: $67.75 per barrel (↓ 5.2%)
WTI Crude: $65.01 per barrel (↓ 5.4%)
Euro/Dollar: $1.1609 (↑)
Pound/Dollar: $1.3586 (↑)
Dollar/Yen: 145.05 yen (↓)
Tokyo – Nikkei 225: 38,790.56 (↑ 1.1%)
Hong Kong – Hang Seng: 24,181.94 (↑ 2.1%)
Shanghai – Composite: 3,420.57 (↑ 1.2%)
London – FTSE 100: 8,816.78 (↑ 0.7%)
New York – Dow Jones: 42,581.78 (↑ 0.9%)
Meanwhile this global oil price crash is yet to reflect in Nigeria
Hopefully it would soon enough!