US Halts Airstrikes Against Iran, Oil Prices Plummet

Oil prices plummeted on Monday after the US halted its campaign of airstrikes against Iran over the weekend, sparking hopes of a diplomatic solution to deescalate tensions and resume oil shipments through the Strait of Hormuz.

Brent crude futures fell $8.42, or 8.7%, to settle at $88.36 a barrel, the lowest since July 17, while US West Texas Intermediate crude futures dropped $6.70, or 7.5%, to close at $82.61, the lowest since July 16.

The abrupt suspension of airstrikes came as President Donald Trump told Axios News that the United States is in 'very deep talks with Iran,' but threatened he was ready for 'strong military action' if diplomacy fails.

Analysts warned that oil markets will remain volatile as long as physical flow remains constrained, despite the truce. Shipping volumes through the Strait of Hormuz have been heavily depressed since mid-June, limiting Middle East exports and forcing longer, costlier reroutes via Suez for Saudi Red Sea cargoes.