Global Crude Prices Crash Over 7%, US-Iran Strike Pause Eases Supply Fears
· Free Press Journal
New Delhi: Global crude oil prices fell sharply on Monday after the United States and Iran paused military strikes over the weekend, raising hopes of reduced tensions and a possible diplomatic solution.
Visit h-doctor.club for more information.
International benchmark Brent crude dropped more than 7 percent, losing about USD 7 to trade near USD 91 per barrel.
US West Texas Intermediate crude also declined over 7 percent. It fell by around USD 6.4 to trade below USD 85 per barrel.
Conflict Eases
The selling followed Iran’s indication that it would stop further attacks if the US also halted its military operations.
Oil prices had risen during the previous three weeks. Brent crude crossed USD 100 per barrel as the conflict raised fears over supplies passing through the Strait of Hormuz and the Bab el-Mandeb Strait.
Risks Remain
Despite the pause in strikes, market experts warned that geopolitical risks remained high.
Attacks claimed by Iran-backed Houthi forces on Saudi Aramco facilities at the Red Sea ports of Jizan and Yanbu have increased concerns about the security of Saudi oil exports.
Sensex, Nifty Fall Over 0.7% As Crude Oil Surge, Trump Tariffs Hit SentimentShipping activity through the Strait of Hormuz has not returned to normal. This means that supply chain problems could reappear if tensions rise again or the pause in military action breaks down.
Even after Monday’s correction, crude oil prices remain nearly 40 percent higher this month. Prices had climbed as supply disruption fears spread from the Strait of Hormuz to the Red Sea.
Rupee Gains
The sharp fall in oil prices supported the Indian rupee because India imports most of its crude oil requirements.
Crude Oil Futures Surge Nearly 6% On MCX, US-Iran Conflict Pushes Prices To ₹7,198 Per Barrel Amid Supply FearsThe rupee appreciated 41 paise at opening on Monday, recording its biggest gain in nearly two months. It opened at 96.15 against the US dollar, compared with its previous close of 96.56.
Lower crude prices can reduce India’s import bill, ease inflation concerns and limit pressure on the domestic currency. However, future price movements will depend on whether the US-Iran pause continues and shipping routes return to normal.