Iran-US Ceasefire Fears Ease as Oil Prices Plummet

Oil prices plummeted on Monday after a pause in hostilities between the US and Iran boosted hopes for a return to their ceasefire. The conflict had escalated over the weekend, but both countries held back from further attacks, allowing shipping to continue through the Strait of Hormuz.

The US West Texas Intermediate was down 4.3% at $85.45 a barrel, while Brent North Sea crude fell by 3.9% at $92.97 per barrel.

National Australia Bank's Sally Auld noted that developments in the Middle East had moved in a positive direction over the weekend, adding credibility to the notion that oil above $100 a barrel seems to induce de-escalatory behavior from both sides.