Oil Prices Plummet on Hopes for US-Iran Conflict Resolution
Oil prices fell to their lowest in more than a week on Tuesday as hopes for a resolution to the US-Iran conflict rose. Brent crude futures dropped $1.68, or 1.90%, to $86.68 by 1111 GMT, while U.S. West Texas Intermediate crude declined $1.28, or 1.55%, to $81.33 per barrel.
The drop in oil prices was partly due to Oman's plan to let Tehran collect voluntary fees to use the Strait of Hormuz, a key oil shipping chokepoint. The Gulf state has won backing from other Gulf states for this proposal, which could help end disruptions to oil trade caused by the US-Israeli war on Iran.
However, analysts warned that the risks of supply disruptions spreading to the Red Sea remain elevated. Saudi Arabia shot down drones aimed at petroleum targets last week, and Houthi allies in Yemen targeted the East-West Pipeline carrying oil to Saudi Arabia's main Red Sea port of Yanbu.