Oil Prices Plummet Amid Shift to Economic Pressure Against Iran
Oil prices plummeted more than 3% on Tuesday to their lowest level in nearly a week, shrugging off the latest US sanctions campaign against Iran. The shift from military conflict to economic pressure has reduced anxiety in the oil market, according to Ole Hansen, head of commodity strategy at Saxo Bank.
The Brent crude futures fell by $3.07, or 3.33%, to $89.10 per barrel, while U.S. West Texas Intermediate crude dropped by $2.93, or 3.45%, to $82.08. Both benchmarks reached their lowest levels since August 17.
Analysts noted that the economic pressure campaign has eased concerns about further threats to Middle Eastern oil supplies, even though the key Strait of Hormuz remains largely closed. However, Iran still retains the ability to respond by disrupting shipping, which continues to support a residual premium in oil prices, said Tim Waterer, chief market analyst at KCM.
Elsewhere, an oil refinery in Novoshakhtinsk in Russia's southern Rostov region was damaged by a drone overnight and suspended operations. A fire broke out on Tuesday at the Atyrau oil refinery in western Kazakhstan.