Middle East Supply Concerns Ease, Oil Prices Plummet

Oil prices plummeted on Monday as concerns over supply disruptions in the Middle East and Black Sea began to ease, wiping out some of this month's geopolitical risk premium.

Brent crude dropped more than 9% intraday before stabilizing around $90/bbl, while West Texas Intermediate declined after the US paused military strikes against Iran following nearly two weeks of attacks. The pause reduced immediate concerns that the conflict could further disrupt regional oil flows or commercial shipping through key export routes.

Market sentiment also improved after crude loadings resumed at the Caspian Pipeline Consortium (CPC) terminal on Russia's Black Sea coast, a critical export outlet for Kazakh oil. Shipowners had avoided the terminal following recent Ukrainian drone attacks, raising concerns over supply disruptions to European markets.

Despite Monday's selloff, crude futures remain up roughly 20% this month as conflict across the Middle East continues to disrupt global trade routes. Shipping through the Strait of Hormuz remains well below normal levels, while attacks by Iran-backed Houthi militants in the Red Sea continue to pose risks to Saudi export infrastructure and regional crude flows.