West Texas Intermediate (WTI) crude oil prices have fallen significantly since hitting an intraday high of $77.11 per barrel on Monday, dropping to an intraday low of $64.50 per barrel today. This represents a decline of approximately 16.3 percent over this 3 day period.
The sharp price drop can be traced primarily to the announcement of a ceasefire between Israel and Iran, which eased fears of supply disruptions in the volatile Middle East region. On June 23, U.S. President Donald Trump announced that Iran and Israel had agreed to a ceasefire, with Iran beginning the truce immediately and Israel following after 12 hours. If upheld, the ceasefire would end 12 days of hostilities, calming market concerns about potential interruptions to oil supply from the region.
Before the ceasefire announcement, oil prices had surged following U.S. military strikes on Iranian nuclear facilities over the weekend, which had raised fears of escalating conflict and supply risks. On Sunday, WTI crude jumped by 2.38 percent to $75.60 per barrel, reflecting heightened geopolitical tensions. However, once the ceasefire was announced, the market quickly reversed course, with WTI futures falling more than 6 percent on June 23 alone.
This volatility underscores how sensitive oil markets remain to geopolitical developments in the Middle East, where roughly 20 million barrels per day, or about 20 percent of global oil consumption, pass through the Strait of Hormuz, a critical chokepoint.
The recent price decline also fits into a broader downward trend for WTI oil this year. In April, the U.S. Energy Information Administration (EIA) lowered its WTI price forecasts for 2025 and 2026, projecting averages of $63.88 and $57.48 per barrel respectively, down from earlier estimates above $70 per barrel. Major financial institutions like J.P. Morgan and Goldman Sachs have similarly revised their forecasts downward, anticipating average WTI prices near $62 to $63 per barrel in 2025 and further declines in 2026.
Market pressures earlier in the year included weak demand signals, rising supply from OPEC+ production increases, and economic concerns such as slowing growth in China and renewed U.S.-China trade tensions. These factors contributed to sharp price drops in May, when WTI briefly fell below $58 per barrel, its lowest level in nearly two years.
WTI crude futures are trading near $64.50 per barrel, reflecting a market that remains cautious amid ongoing geopolitical risks but also tempered by easing conflict fears and persistent supply concerns. For investors and energy market watchers, the recent price swings highlight the complex interplay between geopolitical events and fundamental supply-demand dynamics.
