Oil Prices Plummet Amid Hopes of Iran-US Conflict Resolution
The price of oil plummeted over 9% on Monday as hopes rose that a pause in US-Iran attacks could lead to a resolution in the conflict. Brent crude, the global benchmark for oil, dropped below $88 a barrel after US Ambassador to the UN stated that attacks had been halted for two consecutive nights to give 'talks some space'.
This sharp turnaround came just days after oil prices rose above $100 a barrel as the Iran-US conflict led to fears of disruptions in global energy supplies. The Strait of Hormuz, which carries about 20% of the world's oil and liquefied natural gas (LNG), was effectively closed due to the conflict.
Susannah Streeter, chief investment strategist at Wealth Club, noted that markets remain 'cautious' given the twists and turns in this conflict. Despite the sharp fall in crude prices, there is still significant uncertainty baked into these prices, and a reticence about whether negotiations will lead to a lasting breakthrough.