Middle East Tensions Ease, Oil Prices Fall Sharply
Oil prices fell on hopes of easing tensions in the Middle East after US economic sanctions on Iran did not include immediate penalties for countries doing business with Tehran. The West Texas Intermediate (WTI) traded near $82 a barrel, down about 6% for the week. This decline comes despite concerns over supply disruptions due to the ongoing conflict in the region.
The recent dip in crude prices has been driven by hopes of progress in negotiations over the Strait of Hormuz, through which a significant portion of global oil exports pass. President Donald Trump noted that about 10 million barrels of oil passed through the strait in a single day. However, Iran has emphasized that the navigation agreement does not mean the strait will be fully reopened immediately.
Oil remains up more than 40% this year as the six-month conflict in the Middle East has disrupted energy supplies from the Persian Gulf. The volatile session earlier saw oil prices rise after reports of Russian President Vladimir Putin's plans to intensify the offensive against Ukraine, only for gains to evaporate later.