Oil prices dipped sharply to their lowest levels in more than a week on Tuesday as U.S. President Donald Trump announced that a ceasefire has been agreed between Iran and Israel, alleviating concerns about potential supply disruptions in the Middle East, a significant oil-producing region.

Brent crude futures declined by $2.08, or 2.9 percent, to $69.40 a barrel around 03:30 GMT (currently trading above $68.75), after previously tumbling more than 4 percent and hitting their lowest level since June 11.

U.S. West Texas Intermediate crude dropped $2.03, or 3.0 percent, to $66.48 per barrel (currently trading above $66.5), having plummeted 6 percent to its weakest level since June 9 earlier in the session. Trump announced on Monday that both Israel and Iran have fully agreed to a ceasefire, stating that Iran will begin the ceasefire immediately, followed by Israel after 12 hours. If both parties maintain peace, the conflict will officially conclude after 24 hours, ending a 12-day period of hostilities.

Both oil contracts settled over 7 percent lower in the previous session after rallying to five-month highs following the U.S. attack on Iran’s nuclear facilities over the weekend, which raised fears of an escalating Israel-Iran conflict. With the immediate threat to the vital Strait of Hormuz shipping lane seemingly diminished, U.S. crude futures fell another 3.4 percent to $66.15 per barrel, the lowest since June 11.

Source: Economymiddleeast