WTI crude falls sharply after strikes avoid Iranian energy infrastructure, signaling a managed standoff rather than an energy crisis.
Oil markets showed muted reaction as the U.S. and Iran agreed to a temporary standdown after four days of military strikes, with WTI crude down 21% from its recent peak. The strikes targeted Iranian military sites, including drone and missile facilities, while leaving energy infrastructure untouched, according to reports.
Prior to the pause, nearly 20% of global oil supply flowed through the Strait of Hormuz, a critical chokepoint where two commercial vessels were struck during the conflict. Despite the disruption, traders appear to be pricing in a managed standoff, with the VIX remaining within its normal range.
The proposed Doha summit lacks a formal framework, leaving the truce fragile. Any incident involving tankers could reignite tensions, though markets currently reflect cautious optimism.