Oil Prices Plummet 3% Amid Shift from Military Confrontation to Economic Pressure

Oil prices plummeted by over 3% on Tuesday as traders downplayed the impact of new US sanctions against Iran, viewing economic pressure as a lower risk to oil supplies than military escalation.

The Brent crude futures dropped by $3.59 or 3.9% to $88.58 a barrel, while US West Texas Intermediate (WTI) crude futures fell by $2.65 or 3.1% to $82.36 per barrel.

Market analysts pointed out that the shift from military confrontation to economic pressure in the US-Israeli conflict with Iran has eased some concerns in the oil market, but China, the largest buyer of Iranian oil, remains a key player in this situation.

China's cooperation with Iran is based on international law and should not be interfered with, according to Beijing. The country may run out of options for buying Iranian oil if the US maritime blockade continues, which could happen by October.

The economic pressure campaign has raised hopes for talks between the US and Iran to resolve their conflict, which began in February when the US and Israel launched military strikes on Iran. Iran and Oman have discussed a proposal for a 'joint temporary navigational corridor' through the Strait of Hormuz and a plan to clear mines from the waterway.