Dhahran, Saudi Arabia — Oil prices and Israel—Iran ceasefire headlines triggered sharp losses on Monday after U.S. President Donald Trump announced a ceasefire between Israel and Iran. The move eased fears of a prolonged Middle East conflict.
West Texas Intermediate (WTI) crude dropped nearly 4%, trading around $66 per barrel. Brent crude hovered near $68 per barrel after the ceasefire.
Oil market reaction to Israel-Iran ceasefire
Trump posted on social media Monday evening: “A full and comprehensive ceasefire has been completely agreed upon between Israel and Iran.” He outlined a timeline for ending hostilities. “Assuming everything proceeds as expected — and it will — I congratulate both countries for having the endurance, courage, and intelligence to end what can be called the ‘12-day war.’”
Earlier Monday, oil prices had already fallen 7% after Iran launched missiles at a U.S. airbase in Qatar. The attack came in response to Washington’s weekend strikes on three Iranian nuclear sites. Prices fell further after Trump described Iran’s reaction as “encouraging.”
“I thank Iran for the early warning, which allowed no lives to be lost and no injuries to occur,” Trump added.
Geopolitical oil tensions ease amid symbolic retaliation
Rebecca Babin, senior energy trader at CIBC Private Wealth, told Yahoo Finance: “Iran’s response appeared more symbolic than escalatory. They targeted U.S. military bases while avoiding casualties or damage to energy infrastructure.”
Markets had braced for Iran’s possible closure of the Strait of Hormuz. Nearly 20% of global oil shipments pass through the chokepoint.
JPMorgan analysts warned that such a closure would be “catastrophic.” It could push oil prices to $120-$130 per barrel.
Despite recent price spikes, JPMorgan’s Natasha Kaneva believes supply-demand fundamentals remain stable. “The world has adequate oil supplies,” she said.
JPMorgan expects oil prices to trade between $60 and $65 per barrel for the rest of 2025. That forecast assumes regional tensions continue to ease.
The Saudi Standard’s View: Temporary Price Relief Masks Ongoing Regional Risk
Markets welcomed the Israel-Iran ceasefire with sharp price declines. However, the region’s geopolitical volatility remains unresolved. The 12-day conflict exposed vulnerabilities in global oil supply routes. The Strait of Hormuz, in particular, remains a flashpoint.
Short-term price relief may not reflect longer-term fundamentals. Saudi Arabia and other Gulf producers must maintain production discipline. They also need to coordinate with OPEC+ to manage unpredictable political developments.
The Kingdom’s role as a reliable supplier and regional stabilizer remains critical. Stability prevents future market disruptions, especially if ceasefire arrangements collapse.
Oil prices and Israel-Iran ceasefire developments will remain key indicators of energy market sentiment as geopolitical risks evolve.
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