Oil prices drop sharply as geopolitical tensions ease, with WTI falling over $14 from last week’s peak amid supply recovery expectations.
West Texas Intermediate crude fell $3.13 to $77.26, extending a steep decline from $91.62 last Thursday. The sell-off follows assurances that the Strait of Hormuz will reopen, easing fears of prolonged supply disruptions.
Before the conflict, WTI traded at $65, and $60 prior to initial war rumblings. The war disrupted 10-12 million barrels per day for roughly 100 days, creating a supply deficit exceeding 1 billion barrels. Analysts warn demand destruction may be limited, with deficits worsening daily.
Market sentiment shifted as traders liquidated inventories, anticipating lower prices. Physical stockpiles, including German heating oil, remain depressed as buyers await further declines before restocking.