Global oil prices plunge as Trump announces Iran-Israel ceasefire

Global oil prices recorded a sharp decline on Tuesday, hitting their lowest levels in over a week, following US President Donald Trump's announcement of a ceasefire between Israel and Iran.

The announcement came after a tense 12-day conflict that had rattled global markets and severely disrupted oil supplies from the Middle East, a key oil-producing region.

Brent crude futures dropped $2.08, or 2.9%, to $69.40 a barrel by 03:30 GMT, after falling over 4% earlier in the session to their lowest level since June 11.

Meanwhile, US West Texas Intermediate (WTI) crude declined $2.03, or 3.0%, to $66.48, after briefly plunging 6%, its weakest since June 9.

President Trump stated that both nations had agreed to a "complete and total" ceasefire, with Iran beginning the ceasefire immediately and Israel following 12 hours later.

If the truce holds, the war will officially end within 24 hours.

Read: Iran launches retaliatory strikes after attacks on oil sites, 10 dead in Israel 

"With the ceasefire news, we are now seeing a continuation of the risk premium built into crude oil price last week all but evaporate," said Tony Sycamore, analyst at IG.

Iran, the third-largest oil producer in OPEC, plays a crucial role in global oil supply. Easing tensions would likely boost Iranian exports and help normalise global oil flows.

The conflict had drawn investor attention to the Strait of Hormuz, a key chokepoint for global oil transport, through which nearly 20% of world's crude oil flows daily.

"Moving forward, the extent to which Israel and Iran adhere to the recently announced ceasefire conditions will play a significant role in determining oil prices," said Priyanka Sachdeva, senior analyst at Phillip Nova.

Both oil benchmarks had previously rallied to five-month highs after the U.S. attacked Iran’s nuclear facilities, triggering fears of a broader regional conflict.