Oil Prices Plummet as US Suspends Strikes Against Iran
Oil prices plummeted on Monday to their lowest levels in over a week as the US suspended its campaign of air strikes against Iran, sparking hopes for a diplomatic solution that would ease shipping disruptions in the Strait of Hormuz.
The Brent crude futures price fell by $8.42, or 8.7 percent, to settle at $88.36 per barrel, the lowest since July 17. US West Texas Intermediate crude futures dropped by $6.70, or 7.5 percent, to close at $82.61, the lowest since July 16.
The price decline comes after the Strait of Hormuz saw a significant reduction in shipping volumes, with fewer than 10 commodity vessels passing through daily during the weekend, according to shipping data from Kpler. This has limited Middle East exports and forced longer, costlier reroutes via Suez for Saudi Red Sea cargoes.
Industry analysts warn that the physical flow of oil remains constrained despite the truce, with PVM analyst John Evans saying that 'the market seems to be forever seeking good news from an arena that really is not providing any.'