Brent Crude Falls Below $93 Amid US-Iran Pause
Oil prices declined on Sunday after the US and Iran refrained from military strikes in the Gulf for a second consecutive day. Brent crude, the international benchmark, fell 4.9% to $92.02 a barrel.
The price drop extends losses from Friday's 3.9% decline. Oil prices surged throughout July as fighting in the region intensified, raising fears of a broader conflict disrupting global oil supplies.
The Strait of Hormuz remains a central concern for energy markets, handling one-fifth of global oil shipments through key shipping routes. Oil producers have sought alternative export routes but faced challenges, including attacks on Saudi oil tankers using the Red Sea route last week.
Analysts warn that sustained increases in oil prices could contribute to higher transportation and shipping costs worldwide, affecting consumer goods and groceries. Market data shows traders pricing in a 36% probability of a US Federal Reserve interest rate hike at an upcoming meeting, which can help curb inflation but slow economic activity.