Crude Oil Prices Plummet 5.3% Amid Hormuz Flows and Iran Sanctions

Crude oil markets experienced a turbulent week, with Brent crude futures ending their two-week winning streak and settling at a weekly loss of 5.3%.

The decline was fueled by a combination of geopolitical developments, supply fundamentals, and economic factors, as oil markets ignored the fresh US sanctions against Iran and priced in the rise in oil shipments via the key Strait of Hormuz.

Brent crude oil futures opened at $92.17 per barrel on Monday, 24 August, reaching a daily high of $93.81 before settling at $92.17 with robust volume of 179,500 contracts. WTI crude oil futures slipped to $85 per barrel on the same day.

The trigger for this sharp decline was the US Treasury's announcement of new economic sanctions targeting entities doing business with Iran, including those in China.