Tensions between Iran and Israel have eased with a new ceasefire, reducing fears of oil supply disruptions. This geopolitical shift has quickly influenced oil markets as traders adjust to a calmer outlook.

Oil prices fall on ceasefire news

Oil prices fell sharply on Tuesday following news of a ceasefire agreement between Iran and Israel, brokered with support from US President Donald Trump.

The accord appears to have ended a 12-day conflict that had sparked fears of potential supply disruptions in the Middle East, a key oil-producing region.

Brent crude futures dropped by $2.69, or 3.76%, settling at $68.79 per barrel as of 0006 GMT.

Earlier in the session, prices had declined by more than 4%, hitting their lowest point since 11 June.

Similarly, US West Texas Intermediate (WTI) crude fell $2.70, or 3.94%, to $65.46—marking its weakest level since 9 June.

These declines come on the heels of a recent rally to five-month highs, previously fuelled by US airstrikes on Iranian nuclear infrastructure.

Technical analysis: WTI crude under pressure

A review of the 15-minute CL-OIL-ECN chart shows a steep reversal in oil prices. After reaching a peak of $77.903, WTI has now shed over $13 in value within a matter of days.

Tuesday’s intraday low touched $64.373. While there was a slight recovery, prices continue to trade below the 30-period moving average, which now serves as a dynamic resistance zone.

Picture: Heavy selling in crude triggers technical breakdown below 68.00, as seen on the VT Markets app.

From an MACD (Moving Average Convergence Divergence) perspective, the histogram has started to edge into positive territory, and the MACD line is beginning to curl upwards – signalling a potential short-term bounce.

Nevertheless, price action remains confined within a descending channel, with key resistance seen around $70.00.

If the ceasefire agreement holds, a sustained recovery may prove difficult. Strong resistance persists between $78.40 (October 2024 high) and $80.77 (2025 high).

Unless a fresh supply shock emerges, the near-term bias appears bearish, with possible support forming near $64.00.

Market sentiment shifts as geopolitical risk fades

Iran—OPEC’s third-largest oil producer—is now expected to resume exports at full capacity, which would increase global supply and alleviate recent pressure on prices.

The rapid de-escalation in regional tensions has removed one of the key bullish narratives from the market.

The previous week’s surge, driven by fears of a broader regional conflict, has been largely reversed.

With both Tehran and Tel Aviv committing to the phased ceasefire terms, which involve a 24-hour step-by-step de-escalation, market participants are now reassessing the likelihood of future supply interruptions.

Should the truce hold, WTI crude may consolidate between $64.00 and $68.00.

However, renewed hostilities or a breakdown in diplomatic progress could trigger a sharp rebound in oil prices.

In the coming sessions, traders will be closely monitoring US inventory figures, as well as any new signals from OPEC, to gauge the next move.

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