Oil Prices Plummet as Diplomatic Hopes Offset Saudi Arabia Attacks
The global oil market is facing a delicate balance between hope and uncertainty as diplomatic efforts to resolve the US-Iran conflict gain momentum. The possible phased agreement between Washington and Tehran has raised hopes that the Strait of Hormuz could reopen, potentially reducing supply risks and easing pressure on crude prices.
However, fresh Houthi missile attacks on Saudi Arabia have reminded traders that key energy routes remain exposed to further disruption. On Friday, Brent crude fell 0.9% to around $105 a barrel, while West Texas Intermediate (WTI) dropped about 1.6% to roughly $93.
The market's volatility is reflected in the sharp daily moves in Brent and WTI, with prices surging as much as 5% on Thursday before retreating on Friday. Analysts at Goldman Sachs have highlighted the sensitivity of crude prices to developments involving Middle Eastern shipping, predicting that oil could reach $120 a barrel if attacks intensify.
The direction of crude prices will depend heavily on whether the diplomatic track produces a concrete agreement and whether Middle East attacks continue to threaten energy infrastructure and shipping. A credible deal that leads to the reopening of the Strait of Hormuz could reduce fears about prolonged supply disruptions, while additional attacks could put renewed upward pressure on crude.