Key Points
- Brent trades between $88 and $92 a barrel
- Markets continue to monitor Hormuz traffic
ISLAMABAD: Global oil prices fell by five to seven per cent on Monday after the United States and Iran paused hostilities over the weekend, easing the Middle East energy supply concerns and extending a retreat from recent highs.
Brent crude, the international benchmark, traded between approximately $88 and $92 per barrel during the session, while US West Texas Intermediate (WTI) hovered in the mid-$80s.
Reuters and the Associated Press reported Brent at around $92 per barrel, while electronic trading platforms showed the benchmark dipping below $88 intraday.
Oil prices went down sharply after Washington refrained from launching new strikes on Iran, and Tehran similarly paused retaliatory action, reviving hopes that diplomacy could prevent a broader regional conflict.
Lower oil prices also boosted sentiment across global financial markets by easing concerns about inflation and energy costs.
Oil futures hit over a 10 per cent decline
The latest prices are well below the conflict-driven peak of about $102 per barrel reached during the recent 15-day exchange of strikes between the United States and Iran. During the height of tensions, fears of disruptions to shipping through the Strait of Hormuz pushed oil markets sharply higher.
Depending on the benchmark and contract month used, Brent has now retreated by roughly 10 per cent to 14 per cent from its recent high, underscoring how quickly geopolitical risk premiums can dissipate when tensions begin to ease.
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Oil prices had surged earlier this month as traders assessed the possibility of a wider conflict affecting regional energy infrastructure and tanker traffic in the Arabian Gulf.
The Strait of Hormuz, a critical maritime chokepoint, carries nearly one-fifth of global oil consumption, making any threat to navigation a major concern for energy markets.
Despite the pullback, analysts cautioned that risks remain elevated. Shipping activity through the Strait of Hormuz has yet to be fully normalised, and any collapse in the current pause could quickly restore the geopolitical premium that drove Brent above the $100-a-barrel mark only days ago.
The latest downturn highlights the volatility that has characterised oil markets throughout July, with investors continuing to weigh geopolitical developments against broader supply and demand fundamentals.
