Oil Prices Plunge 4% on Hopes US-Iran Ceasefire Will Reopen Strait of Hormuz
Key Takeaways
- Oil prices fell about 4% on hopes of a Middle East ceasefire easing supply risk.
- WTI crude futures slid roughly 3-4%, trading near $88-$89 per barrel.
- U.S.-Iran 15-point ceasefire proposal raised expectations for reduced regional supply risk.
Oil Falls on Ceasefire Hopes
Oil prices sank about 4% on reports the US had sent Iran a 15-point proposal aimed at ending the war.
“The dollar held firm against major currencies on Thursday, as fading hopes of Middle East de-escalation revived the risk of a prolonged energy shock and boosted safe-haven demand”
Brent crude fell $4.17 to $100.32 a barrel, and WTI was down $3.11 at $89.24.
Both benchmarks had risen nearly 5% the previous day.
Strait of Hormuz and Pipeline Blockages
Iran's foreign minister said the country was reviewing the proposal but did not intend to hold talks.
Oil shipments were all but halted through the Strait of Hormuz.
Regional pipeline blockages in the UAE and Saudi Arabia also contributed.
Analysts Warn of Continued Volatility
Uncertainty over whether negotiations will succeed would limit selling.
“Oil falls on prospect of Middle East ceasefire easing supply disruption US West Texas Intermediate crude futures were down $3”
Middle East developments would remain the dominant price driver.
Oil prices would keep moving in a wide range.
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