Oil Prices Plunge 8.7% Amid De-Escalation Hopes

The price of Brent Oil has plummeted by 8.7% to USD 88.36, reversing much of last week's surge as US-Iran tensions eased and markets priced in de-escalation.

Commerzbank strategist Charlie Lay notes that the decline in oil prices largely reflects expectations of de-escalation rather than an actual restoration of global Oil and LNG flows.

The Strait of Hormuz, which accounts for around one-fifth of global oil and LNG supplies, remains a shipping bottleneck, but the sharp drop in oil prices suggests that markets are pricing in hopes of improved relations between the US and Iran.