Oil Prices Plummet as US-Iran Conflict Enters Lull
The conflict between the US and Iran has entered a lull after two weeks of military action. The easing of tensions in the Middle East sent oil prices plummeting nearly 5% intraday.
Despite reports of back-channel diplomacy, it remains uncertain whether this will lead to a ceasefire or an end to the war.
A halt to airstrikes by the US was ordered by President Donald Trump on July 24, according to The Wall Street Journal. This move has been met with skepticism, with a senior Iranian source telling Reuters that it is seen as a tactical judgment rather than a genuine step towards peace.
The Strait of Hormuz shipping conditions remain unresolved, and disruptions in the Red Sea have added to the risk. Investors are cautious about calling a sustained downturn in oil prices, with RBC Capital Markets' Helima Croft stating that shipping through the Strait is unlikely to normalize anytime soon.