Oil prices tumbled on Tuesday to their lowest level in more than a week as U.S. President Donald Trump said a ceasefire has been agreed between Iran and Israel, relieving worries of supply disruption in the area.

Brent crude futures fell $2.69 or 3.76% to $68.79 a barrel as of 0006 GMT, after falling more than 4% earlier in the session and touching its lowest level since June 11.

U.S. West Texas Intermediate crude slumped $2.7, or 3.94%, to $65.46 per barrel, having hit its weakest level since June 9 earlier in the session and falling around 6%.

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.

He 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 U.S. attacked Iran's nuclear facilities over the weekend, stoking fears of a broadening in the Israel-Iran conflict.

"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.

Reuters