Oil prices fell sharply Tuesday, returning to levels seen before the Iran-Israel conflict, as investors cheered news of a ceasefire, albeit fragile, between the two countries.

A successful Iran-Israel ceasefire would abate concerns over Tehran's crude supplies and the stability of oil transport through the Strait of Hormuz.

Oil prices erased some of their steep decline after Israel warned of new missile fire from Iran and pledged to retaliate, threatening a ceasefire announced just hours earlier by US President Donald Trump.