Oil prices have fallen sharply after Iran retaliated against US airstrikes but did not escalate tensions by blocking the Strait of Hormuz. This essential waterway facilitates 20% of global oil supply. Brent Crude prices plunged over 5.6% as fears of further Iranian attacks subsided. The strategic waterway has been threatened in the past but remains open, providing some stability in the oil market. However, analysts caution that the risk of volatility persists due to geopolitical tensions, comparing today’s risks to the market disruptions seen during the Ukraine crisis in 2022.
Oil prices saw a sharp decline following Iran's restrained response to the US strikes, demonstrating that the Strait of Hormuz will remain operational for now.
Despite Iran's prior threats to close the Strait of Hormuz, the decision rests with the Supreme National Security Council, indicating potential volatility ahead.
Brent Crude oil prices dropped over 5.6% after hitting five-month highs, influenced by geopolitical tension but stabilized by current assurances from Iran.
While the possibility of closing the Strait of Hormuz exists, analysts believe that current oil market conditions are sufficiently resilient to absorb potential shocks.
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