Brent crude fell sharply as markets priced in reduced geopolitical risks, reversing last week’s surge despite limited impact on actual oil flows.
Brent crude prices plunged 8.7% to USD 88.36, marking the steepest one-day decline in over three months. The drop followed a third consecutive day of easing US-Iran tensions, which drove expectations of de-escalation in the Middle East.
The decline reversed much of last week’s 9.9% rally, though shipping through the Strait of Hormuz—a key chokepoint for global oil and LNG supplies—remains minimal. Analysts noted the price move reflected sentiment rather than a tangible restoration of energy flows.
The sharp pullback has alleviated some immediate inflationary pressures, potentially influencing Fed policy expectations.