Oil Prices Plummet as US-Iran Hostilities Pause

Oil prices plummeted on Monday, July 27, as a pause in hostilities between the US and Iran sparked hopes for a return to their ceasefire and negotiations over reopening the Strait of Hormuz. The US held fire over the weekend after 13 days of attacks on sites in Iran, with Donald Trump's UN envoy stating that the president was giving talks some space.

Tehran said it would stop its retaliatory attacks on regional neighbors, providing a respite for Gulf shipping and the oil industry. The conflict had escalated earlier this month after Iran attacked ships passing through Omani waters in the Strait of Hormuz, derailed diplomatic efforts between Washington and Tehran, and saw Iran-backed Houthi rebels in Yemen strike Saudi vessels in the Bab al-Mandeb Strait.

Crude prices soared on the flare-up, with Brent breaking above $100 a barrel last week for the first time since May. However, news that shipping continued in the Red Sea helped investors pare their gains on Friday.