WTI Crude Oil Drops From $95 to $89 as Iran and Israel Halt Fire

Crude Prices Retreat From Recent Spikes

The U.S. benchmark West Texas Intermediate (WTI) crude oil dropped below the $90-a-barrel threshold Tuesday as energy markets retreated following a pause in the latest Israeli-Iranian hostilities. Market data showed that WTI crude traded around $89.13 a barrel, a more than 5% decline from the $95 seen shortly after Israel launched retaliatory strikes on Iran. Similarly, Brent crude, which spiked to just under $98 a barrel amid Middle East tensions, slid to $93 a barrel, a level last seen on June 5.

Shattering a tense, months-long calm, these explosive exchanges marked the first direct flashpoint between Israeli and Iranian forces since their April ceasefire. The sudden escalation directly blindsided ongoing, back-channel negotiations between Washington and Tehran designed to permanently defuse the regional conflict. Tehran quickly blamed Israel for the flare-up, asserting its strikes were a necessary retaliation for Israeli aggression in Lebanon—actions Iran maintains constitute a flagrant breach of the standing truce.

However, shortly after both sides exchanged fire, U.S. President Donald Trump called for a cessation of hostilities. Hours later, Iran issued a statement saying it was pausing strikes. Likewise, Israel said it was ending its campaign but warned of a harsher response if attacked again.

Nevertheless, some commentators warn of further and even deadlier skirmishes between Israel and Iran because of their different interpretations of the ceasefire terms. Furthermore, the longer the negotiations between the U.S. and Iran drag on, the higher the likelihood of hawks on both sides prevailing and returning the two countries to war.

The end of hostilities and a return to the diplomatic track brought relief to global markets, which tanked early Monday. In South Korea, the Kospi index, which plunged to one of its worst single-session lows, jumped by over 600 points, or 8%, while the Nikkei 225 was up by 2%. In Europe, the DAX and CAC 40 were marginally higher, while the FTSE 100 was down by 0.36% at the time of writing.

Reaction in the cryptocurrency market was mixed, with bitcoin dipping below $63,000, which effectively erased some of its Monday gains. Many high-cap altcoins, on the other hand, logged daily gains of 1% to 2%, while a few, including privacy coins Zcash and Monero, recorded gains exceeding 5%. Several coins also saw red, led by LAB, which tumbled 17.6%.