Oil Prices Plummet Amid U.S.-Iran Ceasefire, Geopolitical Risks Remain Underpriced

The recent ceasefire between the U.S. and Iran triggered a sharp drop in oil prices, with Commerzbank stating that the geopolitical risk premium remains underpriced.

Brent crude futures briefly plunged more than 8% to $89.75 per barrel during the European trading session on Monday, July 27, before recovering to around $90.50 per barrel.

The pause in hostilities has opened a rare diplomatic window in a conflict that has lasted five months, accelerating the unwinding of the geopolitical risk premium and triggering the steepest single-day decline in oil prices in recent months.