Oil price dives as US and Iran pause attacks
Summary
The price of oil dropped by more than 9% on Monday after the US and Iran stopped attacks for a few days to allow talks to continue. This pause has eased fears about disruption to important shipping routes and global energy supplies, leading to lower oil prices.Key Facts
- Brent crude oil price fell below $88 per barrel, down from over $100 last week.
- The US ambassador to the UN confirmed a pause in attacks on Iran for two nights to support negotiations.
- Iran also announced it stopped retaliatory attacks in the region during this pause.
- The conflict caused the near closure of the Strait of Hormuz, a key waterway for 20% of the world’s oil and gas shipments.
- An earlier June deal between the US and Iran had reopened the Strait, dropping oil prices to around $70 per barrel.
- The ceasefire broke down earlier this month, causing oil prices to climb again.
- Additional attacks by Yemeni Houthis on oil tankers caused concern over other export routes.
- Higher oil prices have increased the cost of fuel and other goods, contributing to higher inflation worldwide.
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