WTI crude futures decline sharply on expectations of reduced geopolitical risk in the Middle East following renewed negotiations.
West Texas Intermediate crude futures fell 7.4% to $78.50 during European trading hours, extending early-session losses. The drop follows the announcement of resumed ceasefire talks between the US and Iran, easing supply disruption fears in key oil-producing regions.
Prior to the talks, WTI had traded near $85.00 last week amid heightened tensions. Analysts had expected a modest pullback, but the scale of today’s decline surpassed consensus estimates. Comparable periods of geopolitical de-escalation in 2023 saw oil prices retreat by 5-6% over similar timeframes.
Markets are pricing in a reduced risk premium, though trading volumes remain elevated as investors await further developments from the negotiations.