LONDON: Oil prices extended losses on Tuesday to hit a two-week low on what the market viewed as lower risk of supply disruptions in the Middle East, though US President Donald Trump accused both Israel and Iran of violating a ceasefire he helped to broker.
Brent crude futures were down $3.52, or 4.92 percent, at $67.96 a barrel by 4:22 p.m. Saudi time. US West Texas Intermediate crude fell $3.42, also 4.99 percent, to $65.09.
Both contracts lost as much as 5 percent in early trade after Trump announced a ceasefire agreement between Israel and Iran.
Trump accused both countries of violating the ceasefire hours after he announced it, expressing particular frustration with Israel.
“I didn’t like the fact that Israel unloaded right after we made the deal. They didn’t have to unload and I didn’t like the fact that the retaliation was very strong,” Trump told reporters on Tuesday.
Prices also fell as Trump posted on social media platform Truth Social that China can now continue to purchase oil from Iran.
Israeli Defense Minister Israel Katz had said that he had ordered its military to mount new strikes on targets in Tehran in response to what he said were Iranian missiles fired in a “blatant violation” of the ceasefire. Iran denied launching any missiles.
The 12-day war has triggered high volatility in oil prices, with Brent crude trading in an $11.86 range on Monday, its widest since July 2022.
Both oil contracts settled more than 7 percent down in the previous session, having rallied to five-month highs after the US attacked Iran’s nuclear facilities over the weekend.
“Oil prices fell sharply, as US strikes on Iranian nuclear facilities failed to trigger a wider conflict that could pose a threat to regional supplies,” Barclays said in a note on Tuesday.
The direct US involvement in the war also focused investors on the Strait of Hormuz, a narrow waterway between Iran and Oman, through which between 18 million and 19 million barrels per day of crude oil and fuels flow, accounting for nearly a fifth of global consumption.
“The geopolitical premium has deflated, but tensions between Israel and Iran remain unresolved – and the risk of missteps and renewed escalation still lingers,” said SEB analyst Ole Hvalbye.
