Oil Prices Stabilize After 11% Plunge, Trump Delays Iran Strike
Oil prices remained relatively stable after plunging around 11% on Monday, as US President Donald Trump backed away from threats to attack Iran's energy infrastructure. Brent prices moved back near US$102 per barrel and WTI around US$91, following a highly volatile session fueled by rapidly shifting geopolitical narratives.
rump said he would delay the strikes for five days and claimed talks with Iran were underway to end the conflict. However, Tehran denied any negotiations, while Israel continued its strikes, leaving the market assessing that the risk of escalation remains intact despite the initial easing of tensions.
Another concern stems from the potential for the conflict to spread to other countries. The Wall Street Journal reported that US allies in the Persian Gulf are beginning to contribute, including Saudi Arabia, which is said to be nearing a decision to join the strikes, according to sources cited by the outlet. This escalation scenario risks reviving the energy risk premium after a sharp correction.
Fundamentally, oil remains supported by supply disruptions caused by the almost complete blockage of the Strait of Hormuz, forcing Gulf producers to cut millions of barrels of daily production. Brent has risen nearly 40% this month, while products like diesel and aviation fuel have strengthened more sharply than crude oil, pressuring consumers and increasing the government's sensitivity to energy inflation.
While ship traffic remains very limited, there are early signs of movement: a small number of vessels have successfully exited the Gulf, including the first supertanker to transport Iraqi oil through the strait since its near-closure. However, RBC Capital Markets emphasized that the physical market will rely more on "actual ships passing through" than on statements, as the IRGC is still seen as effectively controlling Hormuz.
Trump has also linked diplomacy to oil prices, saying prices would fall sharply if a deal is reached and mentioning the possibility of joint management of Hormuz with Iran "if it works." Amidst the conflicting headlines, investors are growing weary; some of the largest moves in Brent's history have occurred since the conflict began, and volatility is expected to remain high until there is concrete evidence of normalization of shipping and a clearer direction for diplomacy.
Source: Newsmaker.id
