Oil Prices Plummet as Hormuz Concerns Weigh on Markets

Oil prices took a hit on Tuesday (Aug 11) as investors weighed fading expectations of higher interest rates against concern over oil flows from the Middle East. The Strait of Hormuz, a critical waterway for global oil supplies, was at the center of the market's attention.

Fawad Razaqzada, a market analyst at FOREX.com, said that crude oil had surged over the past few days due to hopes of a US-Iran agreement to reopen the Strait. However, these hopes have since faded, and oil prices are now back to trading near their highest levels since early June.

The Dow and S&P edged higher in New York, while Frankfurt, London, and Paris were all up slightly in mid-afternoon European trading. David Morrison, senior market analyst at Trade Nation, attributed the slight drop in expectations for Federal Reserve rate hikes to the weak US payroll report.