US-Iran Tensions Ease, Oil Prices Plummet 5% Amid Hopes for Conflict Resolution
Oil prices plummeted by 5% on Tuesday to a two-week low, as hopes grew that the US-Iran conflict could be easing. Brent futures fell $4.27, or 4.8%, to settle at $84.09 a barrel, while WTI crude dropped $3.35, or 4.1%, to settle at $79.26.
The decline came despite Iran's denial of seeking to resume talks with the US, contradicting statements from President Donald Trump that there are 'good talks' underway. The Iranians have consistently held firm against negotiating with the US.
Oman presented a plan backed by Gulf states to manage the Strait of Hormuz, including collecting voluntary fees for using it, but Iran rejected this proposal in favor of a temporary arrangement to reopen the strait under which one direction of traffic would pass through Iranian waters and part of the opposite route would also be in Iranian waters.
Bob Yawger, director of energy futures at Mizuho, noted that 'the market understands the situation is a mess and is trading lower because the two belligerent parties have not attacked each other in the past few days.'