Oil Prices Plunge After Trump Calls Off Attack Against Iran

Oil prices plummeted by over $4 per barrel on Monday after US President Donald Trump called off an attack against Iran and announced that formal talks would begin. The decision led to a sharp decline in global energy markets, with Brent crude futures falling 4.64% to settle at $83.85 a barrel, while West Texas Intermediate (WTI) crude futures dropped 4.74% to $80.66 a barrel.

The price drop follows a previous rally that saw both benchmarks rise by more than 20% last month, fueled by renewed military tensions and attacks by Iran's Revolutionary Guard targeting several oil tankers near Oman. However, with the cancellation of the attack and the start of talks, the market's enthusiasm was short-lived.

Tony Sycamore, a financial analyst at IG, warned that the biggest concern is the possibility of a repeat of last week's scenario, where Iran exerts control over the Strait of Hormuz, perhaps by attacking a US base or a passing oil tanker. He cautioned against 'the collapse of hopes for an agreement if Iran continues to exert control'.

In other markets, spot gold rose slightly by 0.4% to $4,055 an ounce on Monday, receiving support from the pressure on the US dollar following joint intervention by the United States and Japan in the currency markets.