Tuesday, June 24, 2025 - Global oil prices plunged more than 5% on Tuesday, June 24, following Israel's announcement that it had agreed to a bilateral ceasefire proposal put forward by U.S. President Donald Trump, marking a potential end to nearly two weeks of escalating conflict with Iran.
The sharp decline in crude oil came as investor fears of a
prolonged energy market disruption began to ease. The war had raised concerns
about oil supply disruptions, particularly through the critical Strait of
Hormuz, a chokepoint for global energy transport.
By 06:50 GMT, Brent crude had fallen by 5.2%, trading at
$67.75 per barrel, while U.S. benchmark West Texas Intermediate (WTI) dropped
5.4% to $65.01 per barrel.
“The potential end to the conflict has been welcomed by
market participants,” said Lee Hardman, currency analyst at MUFG. “Brent has
now almost fully reversed all of the gains since the conflict began.”
Currency markets reflected the easing tension as well, with
the U.S. dollar slipping after recent strength fueled by geopolitical risk. “If
Middle East tensions now fade as a driver, we’re likely to see the dollar’s
weakening trend resume,” Hardman added.
On Monday morning, oil prices had briefly spiked on fears
that Iran might retaliate for a U.S. strike on its nuclear facilities by
blocking or disrupting traffic in the Strait of Hormuz. However, prices tumbled
up to 7% later in the day when Iran’s response — a missile strike on a U.S.
base in Qatar — left oil infrastructure untouched.
“Tehran played it cool,” said Stephen Innes, managing partner
at SPI Asset Management. “Their retaliation was loud enough for headlines, but
quiet enough not to shake the foundations of the oil market. Once that became
clear, the war premium came crashing out of crude.”
In a formal statement on Tuesday, the Israeli government said
it had “achieved all objectives” of its military operation, claiming to have
eliminated “an immediate dual existential threat: nuclear and ballistic.” It
added that any future violations of the ceasefire would be met with force.
The de-escalation sent positive ripples through global equity
markets. Major indexes in Asia closed higher, with Tokyo gaining 1.1%, Shanghai
up 1.2%, and Hong Kong rising 2.1%. Seoul surged 3.0%, Taipei added 2.1%, and
Sydney climbed 1.0%. Virgin Australia soared after making a strong comeback to
the stock market following its near-collapse over four years ago.
European markets opened in the green as well. London’s FTSE
100 edged up 0.7%, though gains were capped by falling energy stocks like Shell
and BP. Paris rose 1.5%, and Frankfurt jumped 1.8%.
In forex trading, the dollar weakened slightly after U.S.
Federal Reserve Governor Michelle Bowman indicated support for interest rate
cuts should inflation remain steady. Her comments added to market speculation
that the Fed could resume rate cuts by September.
Wan Li, a strategist at HSBC, noted Bowman’s remarks
contributed to a weaker dollar outlook: “Ongoing progress in tariff
negotiations is providing a less risky economic environment to adjust policy.”
Market Snapshot as at 07:00 GMT
Brent Crude: $67.75 per barrel (↓ 5.2%)
WTI Crude:
$65.01 per barrel (↓ 5.4%)
Euro/Dollar:
$1.1609 (↑)
Pound/Dollar:
$1.3586 (↑)
Dollar/Yen:
145.05 yen (↓)
Tokyo –
Nikkei 225: 38,790.56 (↑ 1.1%)
Hong Kong –
Hang Seng: 24,181.94 (↑ 2.1%)
Shanghai –
Composite: 3,420.57 (↑ 1.2%)
London –
FTSE 100: 8,816.78 (↑ 0.7%)
New York –
Dow Jones: 42,581.78 (↑ 0.9%)
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