Oil Prices Plummet as Middle East Tensions Ease
Oil prices plummeted on Monday after US President Donald Trump announced fresh talks with Iran. The news comes as tensions in the Middle East continue to ease, with a dispute over control of the Strait of Hormuz appearing to be near resolution.
The planned negotiations will cover the denuclearization of Iran and the security of the Strait of Hormuz, which has become a key sticking point in the conflict. Trump had threatened to hit Iran 'very hard' but pulled back from that threat on Saturday, saying the 'perimeters' of a deal were in place.
The drop in crude prices was also driven by an agreement between Saudi Arabia, Russia and five other OPEC+ members to boost production by 188,000 barrels per day from September. Brent North Sea Crude fell 4.7% to $83.77 per barrel, while West Texas Intermediate dropped 5.2% to $80.26.
The yen extended gains after the joint intervention between the US and Japan was confirmed. The currency had been hit by higher US interest rates, rising oil prices and persistent capital outflows, but has since strengthened against the dollar.