Oil Prices Plummet as US-Iran Hostilities Pause
Oil prices plummeted on Monday after a pause in US-Iran hostilities boosted hopes for a return to their ceasefire and negotiations on reopening the Strait of Hormuz.
The tit-for-tat strikes between the two nations had caused Brent crude oil to break back above $100 a barrel last week, its highest level since May. However, news that shipping continued in the Red Sea helped investors pare some gains on Friday.
Over the weekend, Donald Trump's UN envoy said the US president was 'giving talks some space', and Tehran announced it would stop its retaliatory attacks on regional neighbours.
The pause in hostilities provided a much-needed respite for Gulf shipping and the oil industry. National Australia Bank's Sally Auld noted that developments in the Middle East seemed to have moved in a positive direction over the weekend, adding credibility to the notion that oil above $100 a barrel induces de-escalatory behaviour from both sides.