Iran-Oman Talks Send Crude Prices Plummeting
Crude oil prices plummeted on Wednesday as talks between Iran and Oman resumed to manage shipping through the Strait of Hormuz, lifting Asian equity screens across the region.
The Brent crude price dropped by 2.6% to around $86.30 a barrel, with WTI near $81. This sudden slide in prices has provided relief to oil-importing economies in Asia and East Africa, where households have been strained by high fuel costs.
In India, the Sensex and Nifty traded higher in early trade, with the Nifty up 23.25 points to 24,356.10. The Energy Information Administration forecasts Brent averaging about $85 per barrel in the third quarter of this year, and falling to $78 by the fourth quarter.
The talks between Iran and Oman follow a June memorandum in which Tehran agreed to make arrangements for safe passage through the strait. While markets are pricing hope into these developments, consumers in Kisumu and Karachi remain cautious, knowing that the relief is provisional until a resolution is reached.