US-Iran De-escalation Unleashes Oil Price Volatility

Oil prices tumbled sharply on Monday after the US paused further military strikes against Iran over the weekend, easing concerns over potential supply disruptions in the Middle East.

The Brent crude price fell by over 5% to $92.10 per barrel, while US West Texas Intermediate (WTI) dropped by 5.3% to $84.57 per barrel.

Traders had been bidding up oil prices in anticipation of supply disruptions through the Strait of Hormuz, a key oil transit route, but with tensions easing, some of that geopolitical risk premium was unwound.

Analysts warn that investors will remain cautious until there is greater clarity on the diplomatic front and shipping activity returns to normal.