Oil prices plunged on Tuesday to their lowest in more than a week as U.S. President Donald Trump said a ceasefire had been agreed between Iran and Israel, easing concerns about supply disruptions in the region.

Brent crude futures fell $2.69, or 3.76%, to $68.79 a barrel by 0006 GMT, after falling more than 4% earlier in the session and hitting their lowest since June 11.

U.S. West Texas Intermediate crude fell $2.7, or 3.94%, to $65.46 a barrel, after hitting its weakest since June 9 earlier in the session and dropping about 6%.

Trump announced on Monday that Israel and Iran had fully agreed to a ceasefire, adding that Iran would begin the ceasefire immediately, followed by Israel after 12 hours. If both sides keep the peace, the war will officially end after 24 hours, ending 12 days of conflict.

He said a "complete and total" ceasefire would be in place with the aim of ending the conflict between the two countries.

"With the ceasefire news, we now see the continuation of the risk premium that was built into crude prices last week almost evaporate," said Tony Sycamore, analyst at IG.

Iran is OPEC's third-largest crude producer, and easing tensions would allow it to export more oil and prevent supply disruptions, a major factor in the surge in oil prices in recent days.

Both oil contracts closed more than 7% lower in the previous session after rallying to five-month highs after the US attacked Iran's nuclear facilities over the weekend, stoking fears of a wider Israel-Iran conflict.

"Technically, overnight's selloff reinforced a resistance layer between about $78.40 (October 2024 and June 2025 highs) and $80.77 (this year's high), and it's clear that it would take something very unexpected and supply-detrimental for crude to break through this resistance layer," Sycamore added. (alg)

Source: Reuters