Oil prices fell sharply, with Brent crude dropping almost 5% as prices slumped, while US stock index futures climbed on Donald Trump’s ceasefire comments.
Oil prices fell to the lowest level in two weeks and US stocks soared as Donald Trump announced that a ceasefire was now in effect between Israel and Iran. The US president’s comments sparked fresh optimism around a lasting pause in the Middle East conflict.
On Tuesday morning, West Texas Intermediate fell 5.5% and was trading near $65 per barrel, while Brent crude also declined 5.3%, hovering near $68 per barrel. Meanwhile, futures attached to the Dow Jones Industrial Average rose 0.7% and contracts on the benchmark S&P 500 gained 0.8%. Futures attached to the tech-heavy Nasdaq 100 climbed 1%.
Oil prices drop as Trump announces ceasefire
In an online post late yesterday, Trump revealed that Israel and Iran had agreed to a ceasefire in the Middle East. On Truth Social, he wrote: “It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE.”
He continued, “On the assumption that everything works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to end, what should be called, ‘THE 12 DAY WAR.’”
As markets woke to news of Trump’s comments, oil prices fell sharply as fears eased around potential disruptions to supply and exports. Iran is the third-largest crude producer in OPEC, and geopolitical escalations involving the country typically raises concerns over global oil flows.
While the Iranian parliament voted to close the Strait of Hormuz, it has so far remained fully operational. Almost 20% of the world’s oil supply passes through the waterway each day, including between 18 and 19 million barrels of crude oil and fuels.
Israel welcomes Trump’s proposal for a ceasefire
The office of prime minister Benjamin Netanyahu confirmed that the country has agreed to the ceasefire. An official statement read: “Israel thanks President Trump and the United States for their support in defense and their participation in eliminating the Iranian nuclear threat”.
“Israel thanks President Trump and the United States for their support in defense and their participation in eliminating the Iranian nuclear threat,” the statement added.
The US president reportedly spoke with the Emir of Qatar, informing him that the US was able to get Israel to agree to a ceasefire with Iran. Trump then asked Qatar to work on persuading Iran to also agree to a ceasefire, which proved successful.
Trump also spoke to Israeli Prime Minister Benjamin Netanyahu on Monday to broker that side of the deal, according to an unnamed US official. An agreement was reached after a series of phone calls that Trump, JD Vance and others held on Monday.
Iranian state media confirm the ceasefire agreement
Hours after Iran’s retaliatory missile strikes on the US Al Udeid base in Qatar, the country’s state media claimed that it had imposed a ceasefire on the enemy. During a live broadcast on Monday, the news anchor did not specify when the ceasefire would begin.
“In response to US aggression, the Sepah [Islamic Revolutionary Guard Corps] carried out successful missile operations. The exemplary steadfastness and unity of our dear people in defending our land has imposed a ceasefire on the enemy,” the anchor declared on Iran’s state-run National News Network.
“Last evening, only an hour after the successful missile attack by the Sepah on America’s Al Udeid Base in Qatar, in a begging-like manner of urging, Trump requested the initiation of a ceasefire in the imposed Zionist enemy war against our country,” the anchor added.
For now, the ceasefire is in effect. Markets will continue to monitor the situation closely as any signs of escalation could trigger renewed volatility across oil prices, equities and safe-haven assets.
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