Oil Prices Stabilize as Israel, Iran Agree to Ceasefire

Oil prices have begun to stabilize after the Israeli government accepted a ceasefire agreement with Iran, according to a statement by US President Donald Trump. In recent days, concerns over a potential oil price spike had intensified after Iran’s parliament announced plans to close the Strait of Hormuz, a vital waterway that carries about 20% of the world’s daily oil supply. 

As of Tuesday afternoon, Brent Crude stands at US$67.70/b, marking a roughly 12% decrease from Friday’s high of US$77.27/b. US West Texas Intermediate (WTI) followed a similar trend, falling from US$74.04/b on Friday to around US$64.67/b, also a drop of around 12%. In Mexico, the price of the Mexican oil mix also declined, going from MX$70.41/b to MX$65.37/b, representing a 7% reduction.

This marks the lowest oil prices since June 10, just days before Israel’s initial strike on Iran. Despite recent conflicts and ongoing uncertainty, oil prices remain relatively low compared to the highs of around US$80/b seen at the beginning of the year.

UTrump has urged both nations to uphold the ceasefire, as reports emerged of both sides violating the agreement just hours after it was enacted. Just hours after his announcement, Israel accused Iran of violating the ceasefire. The Israeli military confirmed it was actively intercepting missiles launched from Iran. However, Iran denied the allegations and instead reported new attacks in recent hours, accusing Israel of reigniting hostilities.