NEW YORK: Global crude oil prices declined sharply on Tuesday, falling about 4% after Iran and Israel reportedly agreed to halt attacks following diplomatic pressure, including an appeal from US President Donald Trump. The development eased geopolitical tensions and triggered a drop in oil futures across international markets.
Brent crude futures fell $3.40, or 3.6%, to $90.85 per barrel at 10:28 a.m. EDT (1428 GMT), while US West Texas Intermediate (WTI) crude dropped $3.71, or 4.1%, to $87.59 per barrel. The decline pushed Brent on track for its lowest closing level since April 17, while WTI is heading toward its weakest close since May 29.
Market analysts say the oil price drop reflects reduced war risk premium following reports of a temporary Iran Israel ceasefire and easing fears of supply disruption in the Middle East. However, uncertainty remains as Iran warned it could resume hostilities if regional tensions escalate further, particularly involving its allies in Lebanon.
Despite the ceasefire signals, Iran continues to restrict shipping through the Strait of Hormuz, a key global oil transit route responsible for nearly one-fifth of global crude oil and liquefied natural gas flows. Any disruption in this corridor remains a major concern for global energy market stability.
Meanwhile, China’s crude oil imports in May fell 29%, marking the lowest level in eight years. This sharp decline in demand from the world’s largest oil importer has added further pressure on global oil prices today and contributed to bearish sentiment in the international energy market.
Investors are also closely monitoring upcoming US Energy Information Administration (EIA) data and weekly inventory reports from the American Petroleum Institute (API). Analysts estimate a crude oil storage draw of 3.4 million barrels for the week ending June 5, suggesting continued tightening in US oil inventories.
Experts say that while short-term crude oil price trends remain volatile, future movement will depend on global oil demand recovery, geopolitical stability in the Middle East, and production decisions by major oil-producing countries.
