New Delhi: Global crude oil prices fell sharply on Monday, with major benchmarks dropping by as much as 7%, after the United States and Iran paused military strikes over the weekend, raising hopes of easing tensions in the Middle East.
International benchmark Brent crude declined by more than 7%, losing nearly $7 to trade around $91 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude also slipped over 7%, falling about $6.4 to trade below $85 per barrel.
The steep decline came after Iran signalled that it would refrain from launching further attacks as long as the US also halted military operations. The development boosted expectations of a possible diplomatic resolution to the conflict, reducing immediate concerns over disruptions to global oil supplies.
The latest correction follows a strong rally over the past three weeks, during which Brent crude briefly crossed the $100-per-barrel mark amid fears that escalating tensions could affect shipments through the Strait of Hormuz and the Bab el-Mandeb Strait, two of the world’s most important energy transit routes.
However, market experts warned that geopolitical risks remain elevated. They pointed to attacks reportedly carried out by Iran-backed Houthi rebels on Saudi Aramco facilities at the Red Sea ports of Jizan and Yanbu as a reminder that the region remains volatile.
Despite Monday’s sharp fall, crude oil prices are still nearly 40% higher this month, reflecting continued concerns over supply disruptions extending from the Strait of Hormuz to the Red Sea, a crucial route for Saudi Arabia’s oil exports.
Experts also cautioned that supply-chain risks have not completely eased, as shipping through the Strait of Hormuz has yet to fully return to normal.
Meanwhile, the Indian rupee strengthened by 41 paise against the US dollar in early trade on Monday, opening at 96.15 compared with the previous close of 96.56, marking its biggest single-day opening gain in nearly two months.
With inputs from IANS