Oil prices drop 5% after Israel-Iran agree ceasefire

Global oil prices fell sharply on Tuesday following a ceasefire between Israel and Iran, easing investor concerns over potential supply disruptions in the Middle East, reports Reuters.

Brent crude, the international benchmark, declined 5% to $68 a barrel. The drop follows a 7% slide on Monday, as markets reacted to the de-escalation of tensions that had threatened to disrupt traffic through the Strait of Hormuz, a key global oil transit point.

Fears of a broader regional conflict had previously pushed oil prices to multi-month highs, driven by speculation over potential closures of the strategic waterway. With the ceasefire now in effect, prices have begun to stabilise.

"Market sentiment has shifted as geopolitical risk premiums ease," said a commodities analyst at a London-based investment firm. "If the ceasefire holds and tensions continue to cool, we expect oil prices to gradually return to pre-crisis levels."