Oil Prices Plunge as US-Iran Deal Sinks in Amid Geopolitical Tensions

On August 17, Middle East developments dominated market sentiment, causing oil prices to fluctuate wildly. The U.S.-Iran 60-day extension agreement was approved, leading to a rapid plunge in oil prices as Brent and WTI futures fell by more than $1.

The Strait of Hormuz remains the Achilles' heel of oil prices, with transit volumes dropping by approximately 19.5% last week and nearly stalling over the weekend. This indicates that actual logistical disruptions are still accumulating, and the decline in oil prices reflects an 'expectation of de-escalation' rather than a 'repair in supply.'

Gold benefited from the weaker U.S. dollar and geopolitical safe-haven demand, maintaining levels near two-week highs. However, strategists at major overseas institutions warn that long positions are becoming crowded, and if geopolitical tensions ease or U.S. Treasury yields rebound, gold prices could correct rapidly.