Crude Oil Drops Sharply After Trump Announces Iran-Israel Ceasefire

Tuesday, 24 June 2025: With easing tensions between Israel and Iran and the US President’s ceasefire announcement, crude oil futures fall over 2% during the early trade on Tuesday. With Trump’s ceasefire announcement, any concerns of supply disruptions from West Asia have now been mitigated.

The decline in crude oil futures can be attributed to the expectation of lower import bills and a better trade balance (for oil-importing nations), which further resulted in a rally in major stock exchanges across Asia. Brent crude for September delivery slipped 2.37% to $68.85, while West Texas Intermediate (WTI) August futures declined 2.73% to $66.64.

On the Multi Commodity Exchange (MCX), July crude contracts were down 4.71% at ₹5,761, compared to the previous close of ₹6,046. August contracts fell 4.22% to ₹5,693 from ₹5,944.

Iran’s Disagreement on Announcement; then a U-Turn

However, Iranian officials issued a differing account. Iran’s Foreign Minister stated that there was no formal ceasefire agreement but confirmed that attacks would cease if Israel halted its military actions by 4 a.m. local time. Iranian military operations reportedly continued until that deadline. Around the same time, the Iranian foreign minister announced that a ceasefire was in place ‘for now’.

The situation had raised concerns about possible disruptions through the Strait of Hormuz, a key shipping route that handles nearly one-fifth of global crude oil exports. Iran’s Parliament had earlier considered closing the strait in response to US airstrikes, though that decision was not implemented.

Crude oil prices had already declined more than 7% on Monday following Iran’s muted response to strikes on its nuclear facilities.

In the broader commodities market, June aluminium futures on MCX dropped 1.25% to ₹245.55. On NCDEX, July jeera contracts rose 0.65% to ₹19,265, while July guar gum futures eased 0.14% to ₹9,500.

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