Oil Prices Plummet as US-Iran Tensions Ease
Oil prices plummeted in early Sunday trading after the United States and Iran avoided fresh military action in the Persian Gulf for a second consecutive day, easing immediate fears of supply disruptions. The price for a barrel of Brent crude oil to be delivered in September dropped 4.9 per cent to $92.02 shortly after trading resumed.
The decline followed a 3.9 per cent drop on Friday and marked a retreat from the two-month high set last week when Brent crude briefly hit $102 a barrel. The increased fighting in the Middle East and worries about a return to all-out war had driven oil prices higher, with traders concerned about disruptions to global oil flows.
The ability of tankers to pass safely through the Strait of Hormuz has been a central concern since the US and Israel attacked Iran in late February. The narrow strip of water off Iran's coast is the route through which a fifth of the world's oil typically leaves the Persian Gulf and heads to customers worldwide.
The price for a barrel of benchmark US oil to be delivered in September fell 5.6 per cent to $84.34 on Sunday, while the price for a barrel of Brent crude to be delivered in October dropped 4.6 per cent to $87.48.