Oil Prices Plummet as US-Iran Conflict Fears Subside
Oil prices plummeted by over 5% on Tuesday to hit their lowest levels in two weeks, driven by cautious hopes that the pause in fighting between the US and Iran may lead to talks to end the war. Brent futures fell $4.27, or 4.8%, to settle at $84.09 a barrel, while WTI crude dropped $3.35, or 4.1%, to settle at $79.26.
The decline comes despite previous halts in fighting between the two nations proving only temporary. Iran has denied seeking to resume talks with the US, contradicting statements from President Donald Trump who reported that there are 'good talks' underway.
Meanwhile, Oman presented a plan backed by Gulf states to manage the Strait of Hormuz, including collecting voluntary fees for using it, but Iran rejected the proposal and instead proposed a temporary arrangement to reopen the strait under which one direction of traffic would pass through Iranian waters.
The market is uncertain about the situation, with Bob Yawger, director of energy futures at Mizuho, saying that 'the two belligerent parties have not attacked each other in the past few days' and that 'the market understands the situation is a mess.'