Brent crude futures were down $2.08, or 2.9%, at $69.40 a barrel around 7:01 AM WAT, after earlier tumbling more than 4% and touching its lowest level since June 11, reports AFP.
U.S. West Texas Intermediate crude declined $2.03, or 3.0%, to $66.48 per barrel, having dived 6% to its weakest level since June 9 earlier in the session.
Both the oil contracts settled over 7% lower in the previous session after rallying to five-month-highs after the U.S. attacked Iran’s nuclear facilities over the weekend, stoking fears of a broadening in the Israel-Iran conflict.
The price crash continues as U.S. President Donald Trump said a ceasefire has been agreed between Iran and Israel, alleviating worries of supply disruptions in the Middle East, a major oil-producing region.
Oil prices had sunk more than six per cent yesterday after Iran attacked a US military base in neighbouring Qatar in retaliation for US weekend strikes on Iranian nuclear facilities.
Trump also announced on Monday that Israel and Iran have fully agreed to a ceasefire, adding that Iran will begin the ceasefire immediately, followed by Israel after 12 hours.
If both sides maintain peace, the war will officially end after 24 hours, concluding a 12-day conflict.
Iran is OPEC’s third-largest crude producer, and the easing of tensions would allow it to export more oil and prevent supply disruptions, a major factor in oil prices jumping in recent days.
The direct U.S. involvement in the war had also focused investors squarely on the Strait of Hormuz, a narrow and vital waterway between Iran and Oman in the Mideast Gulf through which between 18 and 19 million barrels per day of crude oil and fuels flow, nearly a fifth of the world’s consumption.
