WASHINGTON (dpa-AFX) - Reversing the gains from yesterday's session, crude oil prices have plunged on Tuesday after Israel and Iran halted their exchange of attacks. In addition, U.S. President Donald Trump's reassurance on a U.S.-Iran deal in a couple of days and on the quick reopening of the Strait of Hormuz reduced ongoing supply disruption concerns.
WTI Crude Oil for July month delivery was last seen trading down by $3.11 (or 3.41%) at $88.19 per barrel.
The U.S.-Israel versus Iran war entered day number 102 today.
Last Wednesday, Israel and Lebanon agreed for a ceasefire through intensive two-day talks mediated by the U.S. in Washington.
On Sunday, Iran conducted a barrage of ballistic missile strikes on Israel to retaliate against an Israeli attack in the Dahieh district of Beirut, Lebanon targeting Iran-backed militant group, Hezbollah.
Responding to these attacks, Israel carried out military strikes in western and central Iran.
Through Truth Social, U.S. President Donald Trump urged both nations to stop shooting each other.
Concerns of renewed war-threat sprang up in the Middle East, throwing doubts on the possibility of a quicker resolution to the U.S.-Iran conflict that is in the fourth month now.
Later, through another message, Trump announced that Israel and Iran have agreed for a ceasefire.
Trump observed that negotiations between the U.S. and Iran were in the final stage that he did not want to be derailed due to any fresh skirmishes, providing markets a breather.
Today, Trump stated that a powerful and strong U.S.-Iran agreement is in the concluding stage and added that a deal could be reached in a couple of days.
Trump also reassured that the Strait of Hormuz will reopen in 2-3 days once the deal is signed.
Trump reiterated that Iran desperately wants a deal with the U.S. due to its economic condition and claimed that the naval blockade enforced on all its ports is more effective than bombing.
The Strait of Hormuz has been effectively closed since February 28, when the U.S.-Israel versus Iran war began, creating a huge global oil and energy crisis due to the supply disruption.
As a result, oil prices increased worldwide and inflationary concerns pressured major banks to wind up their rate cut plans.
Days before, continuing the rollback of voluntary supply cuts commenced in 2023, seven OPEC+ producers agreed to raise their combined crude oil production targets by 188,000 barrels per day in their virtual meeting after reviewing the market conditions and global oil outlook.
Against the OPEC cartel's planned increase, energy experts compare the 20 million bpd of oil flow through the Strait of Hormuz which has been crippled since the gulf war began.
With recent warnings from energy agencies and global oil majors on rapid depletion of oil inventories, Trump's message today revived consumer sentiments and pulled down crude oil prices.
Since crude oil is a dollar-denominated commodity, investors are also waiting to see the U.S. Federal Reserve's decision on interest rates at its upcoming June 16-17 as interest rates have a bearing on the U.S. dollar value.
The U.S. dollar index was last seen trading at 99.88, down by 0.16 points (or 0.16%) today.
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