London: Oil prices tumbled by nearly 5% on Tuesday after Israel agreed to a ceasefire with Iran after nearly two weeks of conflict. Brent crude, the international benchmark for oil prices, initially fell to $68 a barrel, though it then recovered some ground after Iran and Israel accused each other of violating the ceasefire within hours.

According to BBC, prices had spiked in recent days as concerns grew that Tehran could disrupt global supplies by blockading the Strait of Hormuz, a key shipping route for oil and gas. Crude is currently trading at $69.67, just below the level it was at when Israel launched missiles against Iran’s nuclear sites on 13 June.

“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. However, she noted that “the extent to which Israel and Iran adhere to the recently announced ceasefire conditions will play a significant role in determining oil prices.”

The fall in prices narrowed as Israel claimed that Iran had violated the ceasefire after accusing Tehran of launching a missile strike. Stock markets in the US opened higher, with the S&P 500 and the Dow Jones Industrial Average rising nearly 0.9%, while the Nasdaq increased by more than 1%.

In Europe, the UK’s FTSE 100 index was up 0.4%, while Germany’s Dax increased by 1.7%. In Asia, Japan’s Nikkei share index closed up 1.1%. The Middle East conflict had pushed global energy prices higher, which if sustained would have a knock-on effect on energy bills and petrol prices.

Wholesale UK gas prices dropped by 12.5% on Tuesday after spiking higher. Qatar is a major supplier of liquefied natural gas, which is transported through the Strait of Hormuz. On Monday, Iran had launched missiles at a US military base in Qatar in retaliation for American strikes against Iran’s nuclear sites.

The recent rises in oil prices had led to fears that increased energy costs could make everything—from petrol and food to holidays—more expensive around the world, including in the UK. That is what happened after Russia invaded Ukraine three years ago, affecting people’s lives around the globe.