Oil prices fell sharply to their lowest in more than a week as US President Donald Trump said a ceasefire has been agreed between Iran and Israel, alleviating worries of supply disruptions in the Middle East — a major oil-producing region.

Brent crude futures were down $2.08, or 2.9 per cent, at $69.40 a barrel around 3:30 GMT (8:30am PKT), after earlier tumbling more than 4pc and touching its lowest level since June 11.

US West Texas Intermediate crude declined $2.03, or 3pc, to $66.48 per barrel, having dived 6pc to its weakest level since June 9 earlier in the session.

“If the ceasefire is followed as announced, investors might expect the return to normalcy in oil,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“Moving forward, the extent to which Israel and Iran adhere to the recently announced ceasefire conditions will play a significant role in determining oil prices,” Sachdeva said.

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