Oil prices are dropping sharply on Monday, with the Middle East coming out of a third consecutive night without strikes between Iran and the United States, and Donald Trump leaving “room” for talks according to his ambassador to the UN.
Oil prices are dropping sharply on Monday, as the Middle East comes out of a third consecutive night without strikes between Iran and the United States, and Donald Trump is leaving “room” for talks, according to his UN ambassador.
No American bombings have been reported in Iran since Friday night, marking a pause in hostilities after two weeks of unprecedented bombings since the April ceasefire.
“Since our strategy is basically based on retaliation, we have also halted our operations,” said Iranian army spokesperson Mohammad Akraminia.This calm reassures the markets about the possibility of a diplomatic solution. Around 09:30 GMT (11:30 in Paris), the price of a North Sea Brent barrel for September delivery plummeted 8.52% to $88.53.
Its American counterpart, the West Texas Intermediate (WTI) barrel for delivery the same month, fell 7.32% to $82.77.
However, “this hasn’t yet led to a significant recovery in ship traffic through the Strait of Hormuz,” analysts at ING noted.
This shipping passage, which Tehran has sought to control since the start of the war, remains at the heart of tensions with WashingtonThe navy of Iran’s Revolutionary Guards also prevented six ships from passing through the Strait of Hormuz on Monday, after they had tried to transit through routes not authorized by Iranian authorities, according to Iran’s state television.
And on the new front of the war, between Saudi Arabia and Yemen’s Houthi rebels, backed by Tehran, hostilities have intensified. The Houthis notably targeted oil sites on Saturday.
Iran also warned Ukraine of “unpredictable” consequences after one of its ships was attacked in the Caspian Sea over the weekend, an attack attributed to KievUkrainian President Volodymyr Zelensky said on Saturday that Kyiv had carried out long-range strikes in the Caspian Sea against ships carrying military equipment involving Iran, highlighting the increasingly international dimension of the war between Russia and Ukraine.
So, even though the calm between the United States and Iran is “undoubtedly welcome” given the ongoing tensions, “no one could be blamed for concluding that any truce, ceasefire, or armistice could turn out to be illusory,” noted Tamas Varga, an analyst at PVM…
