Oil edged higher – after posting the biggest two-day decline since 2022 – as traders assessed the Iran-Israel ceasefire and an industry report that pointed to another drop in US crude stockpiles.
Brent crude rose about 1 per cent to near US$68 a barrel, after slumping 13 per cent over the past two days, while West Texas Intermediate was above US$65. Following their brief war, Israel and Iran appeared to be honouring the ceasefire brokered by US President Donald Trump, reducing risks to supplies from the region.
Also on Tuesday, Trump gave China, Iran’s biggest crude customer, the green light to carry on buying its oil, as he sought to bolster the truce. That move appeared to undermine years of US sanctions against Tehran. A senior White House official later signalled that curbs on Iran would remain.
The global oil market has had a wild ride this week, marked by rapid shifts in sentiment. Prices initially spiked after the US bombed Iranian nuclear sites at the weekend, boosting concerns about crude supplies, then got dragged sharply lower as the White House announced the truce between Tehran and Israel. The apparent policy shift on Iranian exports added to the losses.
“A slight upwards correction in crude is to be expected after a two-day plunge,” said Vandana Hari, founder of Vanda Insights. “While the market will keep an eye on the fragile truce for a bit, focus will rotate back to the economic picture, the fate of the US’ tariff negotiations, and Opec.”
The Opec alliance is due to hold a videoconference on July 6 to consider a further supply boost in August. Meanwhile, Trump’s self-imposed deadline to reach trade deals with the US’ major partners falls on July 9. Nations without an accord in place will face the so-called “Liberation Day” tariffs.
