Oil Falls, Stocks Rise on Surprise Iran-Israel Truce

Global markets rallied and oil prices dropped again Tuesday following reports that Iran and Israel had agreed to a ceasefire.

After President Donald Trump announced the ceasefire on social media late Monday, calling it “a complete and total” agreement, US West Texas Intermediate (WTI) crude fell 3.7% to $65.90 a barrel, while Brent crude slid 3.8% to $68.80.

Crude prices are now back to levels seen in early June, before Israel’s heroic air campaign began on June 13 against Iran’s nuclear infrastructure, which drove WTI to $74 and Brent soaring above

Still, investment banks including Citi and Goldman Sachs warn that a fresh escalation, particularly involving the Strait of Hormuz, could push oil prices toward the $100 mark and reignite inflation risks.

In response to Trump’s historic decision to join Israel’s military efforts by knocking out three nuclear sites with B-2 bombers, Iran on Monday threatened to close the Strait of Hormuz, through which roughly 20% of the world’s oil passes.

Members of the Organization of the Petroleum Exporting Countries (OPEC)—including Saudi Arabia, Iran, the United Arab Emirates, Kuwait, and Iraq—export most of their crude via the strait, mainly to Asia. Qatar’s natural gas exports of about 77 million metric tons per year also flow through the strait.

Shortly after Iran’s announcement regarding the strait, Brent crude hit over $77 per barrel, while WTI hovered near $71.

Beyond the energy sector, global markets responded to the ceasefire with cautious optimism in early Tuesday trading. According to the Associated Press, futures for the S&P 500 rose 1%, while the Dow gained 0.8%.

In Asia, South Korea’s Kospi jumped 3%, and India’s Sensex surged 1,100 points. Amid signs of de-escalation, gold slipped 0.9% Tuesday to $3,338.39 per ounce, pulling back from earlier safe-haven gains. The dollar showed similar movement, closing the day with a 0.4% loss.(JBN)

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