FX.co ★ Oil Prices Trim Some Losses as Cease Fire Remains Fragile

WTI crude futures experienced a partial recovery from earlier losses but remained nearly 3% lower, trading at $66 per barrel after an earlier drop of up to 6%. This decline pushed prices below the levels observed on June 12, when Israel launched an attack on Iran. The downward movement was prompted by President Trump's announcement of a ceasefire agreement between Israel and Iran, which both parties seem to have accepted. This development alleviated fears of potential oil supply disruptions, including the potential closure of the Strait of Hormuz, a chokepoint through which over 20% of global oil supply transits daily. Despite the ceasefire, tensions remain high, as Israel has accused Iran of breaching the accord and has warned of potential missile attacks from Iran, pledging retaliation. The International Energy Agency (IEA) has previously assured markets by stating that it holds 1.2 billion barrels in emergency reserves ready for deployment if necessary. Additionally, some OPEC+ nations have already increased output and have the capability to further enhance production if required.