Global Oil Prices Plummet Amid Profit-Taking and Declining Sanctions Concerns

Global oil prices plummeted last week after two consecutive weeks of gains. WTI crude dropped to $83.44 per barrel, a decline of 3.69% from the previous week's close, while Brent fell to $88.28 per barrel, a drop of 6.02%. The sell-off was triggered by profit-taking pressure, with investors aggressively selling off immediately after both benchmark crudes had just posted their second consecutive weekly gain of more than 5%

The market showed less concern over the U.S. sanctions campaign targeting Iran, with investors assessing that economic pressure measures are less likely to disrupt oil supply compared to the risk of escalating military conflict. Developments at the Strait of Hormuz also helped shape the price trend, with investors closely monitoring negotiations between Iran and Oman regarding this critical shipping lane.

However, actual shipping activity through the Strait of Hormuz remains low, with only 7 cargo vessels transiting the strait on August 27, below the 10-day average. Another factor affecting the market was U.S. crude inventory data, which showed that crude stockpiles rose less than expected, adding further downward pressure on prices.