FX.co ★ Oil Extends Losses

WTI crude futures experienced a significant drop, falling approximately 5% to $65.20 per barrel. This decline builds on a 7.5% loss from the previous trading session and brings prices below the levels observed on June 12, following Israel's military action against Iran. This downturn comes on the heels of President Trump's declaration of a ceasefire between Israel and Iran, a move seemingly accepted by both nations. The announcement has alleviated fears regarding potential disruptions to oil supplies and the potential closure of the strategically critical Strait of Hormuz, a passageway for over 20% of global oil shipments. Nonetheless, the ceasefire remains tenuous, with Israel accusing Iran of breaching the truce and warning of possible retaliatory missile strikes. In the meantime, the International Energy Agency has previously assured markets of its preparedness, with 1.2 billion barrels held in emergency reserves ready for deployment if necessary. Additionally, some OPEC+ member countries have already been boosting production levels and are equipped with spare capacity that could be activated to stabilize the market.