Oil prices plunged on Tuesday, hitting a one-week low after a cease-fire between Israel and Iran eased concerns over supply disruptions in the oil-rich Middle East.
International benchmark Brent crude fell by 2.34%, trading at $67.85 per barrel at 10.22 a.m. local time (0722 GMT), down from $69.48 at the previous session's close.
Similarly, US benchmark West Texas Intermediate (WTI) declined by about 2.35%, settling at $65.57 per barrel, compared to $67.15 in the prior session.
On Monday, prices fell about 8.5% during the day, after cease-fire reports following Iran's barrage of missiles aimed at the US military's Al Udeid Air Base in Qatar, which caused no casualties or major damage.
The market had feared Iran's retaliation could target regional energy infrastructure, potentially disrupting flows through the Strait of Hormuz, Daniel Hynes, a senior commodity strategist at the Australia and New Zealand Banking Group, said in a note.
"While the situation can change quickly, this initial response indicates it's reluctant to drag the US into the conflict," Hynes said. "It also highlights that the market had already priced in the risk of a significant disruption."
"Should Iran refrain from escalatory responses, this should keep oil prices elevated but contained," he added.
Earlier on Tuesday, US President Donald Trump announced that a ceasefire between Iran and Israel is now in effect, urging both parties to go along with it. "The ceasefire is now in effect. Please do not violate it!" Trump said on his social media platform Truth Social.
Rising expectations of a Middle East cease-fire, home to a large portion of the world's oil reserves, along with reports of no casualties from Iran's attacks, eased supply concerns and pushed oil prices lower.
However, Iran鈥擮PEC's third-largest crude producer鈥攐pted not to target the Strait of Hormuz, reinforcing expectations that the strategic waterway would remain unaffected.
The strait, which transports about 20 million barrels of oil and petroleum products daily to Asian markets, mainly China, is expected to stay open, contributing to the drop in oil prices.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr