Crude oil prices drop over 5% as Washington pauses military action, easing Fed rate-hike expectations and weakening the USD.
The US suspended its two-week bombing campaign against Iran late Friday, prompting Tehran to pause retaliatory attacks for a second night. A senior Iranian official stated Iran’s stance remains ‘attack for attack,’ with halts contingent on US de-escalation. The pause revived diplomatic hopes, pressuring oil markets at the week’s open.
Shipping data showed reduced traffic through Bab el-Mandeb after Houthi attacks on Saudi oil installations, while Strait of Hormuz transit remained low. Iran also accused Ukraine of targeting an Iranian vessel in the Caspian Sea, adding a new regional flashpoint.
Crude prices fell over 5% as the conflict’s de-escalation eased inflation concerns, reducing bets on aggressive Fed rate hikes. The USD retreated from monthly highs, reflecting shifting risk sentiment.