Oil prices plunged on Tuesday after Israel and Iran agreed a ceasefire, sending shares in oil heavyweights BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) tumbling.
US President Donald Trump was the first to reveal a deal had been agreed, posting at just after 11pm London time that "it has been fully agreed by and between Israel and Iran that there will be a complete and total ceasefire" and that "the war will be considered ended".
Israel's PM Benjamin Netanyahu confirmed the truce, with Iran’s foreign minister saying that "we have no intention to continue our response" provided that Israel stops its aggression and that a final decision on cessation of military operations "will be made later".
Brent crude, which had topped $80 a barrel on Sunday, plunged to below $68 on Tuesday morning, down 12% over the past 24 hours. US West Texas Intermediate, fresh from recent highs of $78, plummeted to below $65 a barrel.
Market analyst Jim Reid at Deutsche Bank said there were still outstanding questions about whether the ceasefire will hold and the future of what remains of Iran’s nuclear programme.
"But as things stand, the past 12 days look set to join the long list of geopolitical shocks that proved temporarily disruptive but had little lasting effect on markets."
BP shares fell 5.4% in early trading on Tuesday, with Shell down 4.1%, with other European giants similarly affected.
Norway's Equinor, Var Energi and Aker BP all crashed over 7% lower, Spain's Repsol dropped 4.5%, Portugal's Galp Energia 4.3%, Italy's ENI 4.2% and France's TotalEnergies SE (NYSE:TOT, EPA:TTE) 4%.