Following the announcement of a ceasefire agreement between Israel and Iran, oil and natural gas prices have significantly decreased. The statement by U.S. President Donald Trump regarding the ceasefire, even amidst ongoing violations of the agreements, has reduced concerns about supply disruptions of energy resources from the Middle East — a key oil-producing region of the world.
This is reported by Business • Media
Reaction of the Oil Market
In light of the news, Brent crude oil futures fell by $2, reaching $69.4 per barrel, while U.S. oil WTI dropped to $66.5 per barrel. The anticipated rise in oil prices due to tensions in the Middle East did not occur, as investors hope for stabilization of supplies.
“If the ceasefire is maintained, investors can expect a return to normal oil price levels,” analysts noted.
Impact on the Gas Market and U.S. Actions
The price of natural gas in the European market plummeted nearly 12% on Tuesday, falling to €35.75 per MWh, which is equivalent to $436.15 per 1000 cubic meters. This sharp decline was a response to the easing of geopolitical tensions and expectations of stability in energy resource supplies.
U.S. President Donald Trump urged energy producers to keep oil prices low. Additionally, he instructed the U.S. Department of Energy to increase oil production in the near future. Energy Secretary Chris Wright stated that his team is already working on this task. However, it should be noted that in recent years, American oil companies have been reluctant to significantly increase production, as WTI oil prices have often been below the production costs at certain fields.