Oil Prices Plummet Amid Hopes of Diplomatic Solution with Iran
Oil prices plummeted on Monday to their lowest levels in over a week after the US suspended its campaign of air strikes against Iran, sparking hopes of a diplomatic solution that could restore shipping through the Strait of Hormuz.
Brent crude futures fell $8.42, or 8.7 percent, to settle at $88.36 a barrel, the lowest since July 17. US West Texas Intermediate crude futures fell $6.70, or 7.5 percent, to close at $82.61, the lowest since July 16.
The suspension of air strikes was announced by Mike Waltz, the US ambassador to the United Nations, who said that President Donald Trump had decided to pause attacks to allow more time for diplomacy. Trump also stated that there's a good chance that something could happen regarding a potential deal and threatened strong military action if diplomacy fails.
Industry analysts warned that oil markets will remain highly volatile in response to updates around the unofficial ceasefire between the US and Iran, with physical flow of oil remaining constrained despite the truce.