Brent crude falls back below $100 as geopolitical tensions ease
Tehran - BORNA - Brent crude briefly fell below $90 per barrel in early trading before settling at $90.93, down six percent, while US West Texas Intermediate crude fell 6.1 percent to $83.83 per barrel.
Brent had briefly surged above $100 per barrel last week after Yemen's armed forces announced a naval blockade against Saudi Arabia, but prices pulled back after Washington halted its airstrikes on Iran following 13 consecutive nights of aerial aggression.
Investors were also encouraged by reports on Friday that China is attempting to revive stalled peace negotiations between Washington and Tehran, raising hopes for a return to diplomacy after weeks of military escalation.
ING analysts said Monday's sharp pullback reflects the market's eagerness to price in any signs of de-escalation after nearly two weeks of war.
Despite the easing tensions, traders remained cautious due to continued shipping disruptions in the Strait of Hormuz and the Bab al-Mandeb strait.
ANZ Bank said the market has so far absorbed disruptions through lower crude imports into China and the release of emergency reserves. However, the bank warned that these buffers are increasingly being eroded as strategic stockpiles dwindle and risks to shipping through the straits persist, leaving oil prices vulnerable to renewed spikes if supply disruptions across the region intensify.
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