Oil Prices Plummet as US-Iran Diplomacy Eases Geopolitical Risks
Oil prices plummeted on Tuesday as diplomatic efforts between the US and Iran intensified, easing concerns over potential supply disruptions.
The international benchmark Brent crude futures fell to around $79 per barrel, a 5.7% drop from its previous close of $83.77. This marks the first time the benchmark has dropped below $80 since July 13.
US Treasury Secretary Scott Bessent stated that Washington and Tehran are continuing negotiations and could reach an agreement to reopen the Strait of Hormuz as early as Tuesday or Wednesday. However, Iranian Foreign Ministry spokesman Esmaeil Baghaei clarified that Tehran is not holding direct negotiations with Washington but rather discussing secure passage through Omani mediation.
The expected resolution has reduced the geopolitical risk premium driving oil prices higher in July. Additionally, OPEC+ has decided to proceed with a planned production increase of 188,000 barrels per day in September, further pressuring oil prices.