Oil Prices Slide as Iran-Israel Ceasefire Takes Effect, Ending ’12-Day War’

Crude oil prices dropped sharply today after former U.S. President Donald Trump announced on social media that a ceasefire between Iran and Israel has officially taken effect, putting an end to nearly two weeks of escalating conflict that rattled energy markets and threatened global oil supply chains.

According to a Truth Social post by Trump, both countries have agreed to the U.S.-brokered ceasefire proposal, with Iran’s state media confirming the cessation of hostilities following what they described as a “final round of missile strikes.”

Market Reaction:

As of midday trading:

• Brent crude was down over 4%, trading at $68.78 per barrel.

• West Texas Intermediate (WTI) followed suit, falling to $65.81 per barrel.

These declines came after days of elevated prices fueled by fears that Iran might blockade the Strait of Hormuz, a critical chokepoint for a third of global seaborne oil exports. While tensions had previously forced oil tankers to reroute or halt operations near the strait, the worst-case scenario—full disruption—was ultimately avoided.

Trump’s Announcement:

In his post, Trump stated:

“On the assumption that everything works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to end, what should be called, ‘THE 12 DAY WAR.’”

He later confirmed:

“The ceasefire is now in effect. Please do not violate it!”

While Trump’s statements were optimistic, uncertainty remains about the long-term durability of the truce.

Tehran Reacts Cautiously

Iranian Foreign Minister Abbas Araqchi noted that the “final decision on the cessation of our military operations will be made later.” Still, no new Israeli attacks had been reported since the deadline set by Tehran — 4:00 a.m. local time on Tuesday — passed without further escalation.

According to Reuters, Trump brokered the truce in a direct phone call with Israeli Prime Minister Benjamin Netanyahu, during which both sides agreed to halt hostilities under the condition of mutual cessation of strikes.

Global Relief, Lingering Risks

This abrupt de-escalation brings temporary relief to a tense Middle East and to energy markets worldwide, which had braced for a wider regional conflict and potential oil shortages. However, analysts warn that volatility may persist, especially if future provocations unravel the fragile agreement.

SOURCE: OilPrice.com | Reuters contributions