Oil prices fell sharply on Tuesday, hitting their lowest in over a week, after United States President, Donald Trump, announced a ceasefire agreement between Iran and Israel, easing concerns over potential supply disruptions in the region.

Brent crude futures dropped by $2.69, or 3.7 per cent, to $68.79 a barrel as of early Tuesday, having earlier plunged more than 4 per cent to their lowest level since June 11.

West Texas Intermediate crude fell $2.70, or 3.94 per cent to $65.46 a barrel on Monday—its lowest since June 9—after sliding nearly 6% earlier in the session.

The drop came after President Trump announced a full ceasefire agreement between Israel and Iran.

Under the deal, Iran would begin the truce immediately, followed by Israel after 12 hours.

If both sides maintain peace, the war will officially end after 24 hours, concluding a 12-day conflict.

“With the ceasefire news we are now seeing a continuation of the risk premium built into crude oil price last week all but evaporate,” said Tony Sycamore, analyst at IG.

Iran, OPEC’s third-largest oil producer, stands to increase exports as tensions ease, reducing the risk of supply disruptions that had recently driven up oil prices.