Oil prices fell on Tuesday, giving up most of the previous session’s gains, after Iran and Israel signaled a pause in attacks following an appeal from US President Donald Trump. However, both sides warned that hostilities could resume, keeping markets cautious.
Market reaction to ceasefire signals
Brent crude futures fell 91 cents, or about 1 percent, to 93.34 dollars a barrel at 0400 GMT. US West Texas Intermediate dropped 1.13 dollars, or 1.2 percent, to 90.17 dollars a barrel. Prices had jumped as much as 5 percent in the previous session due to renewed Israeli strikes in Iran and tensions in Lebanon.
Geopolitical risks keep traders cautious
Tim Waterer, chief market analyst at KCM Trade, said investors remain unconvinced that the truce will hold. Tony Sycamore of IG said the geopolitical backdrop remains tense and a lasting peace deal looks elusive. Traders continue to monitor developments as uncertainty dominates sentiment.
Israel has said it will respond with force if Iran attacks again, while Trump told Axios he warned Netanyahu that escalation could isolate Israel. Washington is also pushing for reopening the Strait of Hormuz, a key global oil route.
On Monday, US forces disabled an unladen oil tanker in the Gulf of Oman after it attempted to sail to an Iranian port, according to the US military.
Markets remain focused on supply risks from the Middle East and potential disruptions to shipping lanes. Analysts say volatility may persist until a clear diplomatic breakthrough reduces escalation threats and restores stability in global energy flows.
Traders also watch upcoming US inventory data and broader economic indicators for direction in crude demand expectations. Uncertainty continues to shape short term price movements globally.
