Oil Prices Plummet on Hopes of De-Escalation in US-Iran Conflict

Oil prices dropped by as much as 7% on Monday after hostilities between the US and Iran paused, easing immediate concerns about disruptions to global energy supplies.

The market reaction reflects growing expectations that the conflict may not escalate further, despite the absence of direct public negotiations between Washington and Tehran. Investors are closely monitoring diplomatic developments because prolonged disruption to oil exports from the Gulf could significantly affect global crude supplies and energy prices.

The Strait of Hormuz remains closed, with Iranian officials denying reports of a formal 10-day ceasefire. Analysts have cautioned that even if diplomatic progress continues, restoring normal shipping operations could take time due to security concerns and the need for shipping companies and insurers to reassess risks in the region.