Brent crude futures were down $2.08, or 2.9%, at $69.40 a barrel around 03:30 GMT, after earlier tumbling more than 4% and touching its lowest level since June 11.

The US 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.

Trump 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.

“If the ceasefire is followed as announced, investors might expect the return to normalcy in oil,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“Moving forward, the extent to which Israel and Iran adhere to the recently announced ceasefire conditions will play a significant role in determining oil prices,” Sachdeva said.

Trump said that a “complete and total” ceasefire will go into force with a view to ending the conflict between the two nations.

“With the ceasefire news we are now seeing a continuation of the risk premium built into crude oil price last week all but evaporate,” said Tony Sycamore, analyst at IG.

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.

Both the oil contracts settled over 7% lower in the previous session after rallying to five-month-highs after the US attacked Iran’s nuclear facilities over the weekend, stoking fears of a broadening in the Israel-Iran conflict.

The direct US involvement in the war had also focused investor 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.

Concerns were growing that any disruption to maritime activity through the strait would catapult prices, possibly into three-digit territory.

For now, however, traders were catching their breath from the recent oil price spike.

“Technically, the overnight sell-off reinforces a layer of resistance between approximately $78.40 (October 2024 and June 2025 highs) and $80.77 (the year-to-date high), and it’s clear that it will take something extremely unexpected and detrimental to supply for crude oil to break through this layer of resistance,” Sycamore added.