Trump's Pause May Be Setting Up Crude's Next Rebound
Oil prices plummeted by as much as 7% on Monday after US President Donald Trump postponed an attack on Iran and backed negotiations aimed at reopening the Strait of Hormuz. Despite the decline, some analysts believe that the market may be getting ahead of itself.
Brent crude pared its decline to trade 5.11% lower at $83.44 a barrel by 4.08am GMT, while West Texas Intermediate fell 5.79% to $79.77. The sell-off was fueled in part by OPEC+'s decision to approve a September production-quota increase of 188,000 barrels a day.
However, the recent quota rises have delivered little additional oil because exports from the Gulf, Russia and Kazakhstan remain disrupted by the Iran and Ukraine wars. Higher production targets matter less when barrels cannot reach buyers.