Brent Prices Drop Sharply, Easing US-Iran Tensions Pressure Oil
Oil prices fell sharply after the United States temporarily halted attacks on Iran. This move eased tensions in the Middle East, although the Tehran-backed Houthi group still claimed responsibility for the attacks on Saudi Arabian targets.
Brent crude rose more than 7% in early trading, dropping below US$90 per barrel, before returning to around US$92 per barrel. West Texas Intermediate (WTI) also weakened, in line with falling natural gas prices in Europe.
After attacking Iran for 13 days, the United States has not resumed its attacks since Friday evening. The Iranian military also stated that Tehran has suspended its response. This situation has raised hopes that a path to de-escalation is beginning to open, although President Donald Trump's policy direction remains a concern for the market.
However, the risk of conflict has not completely subsided. The Houthis in Yemen claimed to have attacked facilities linked to Saudi Aramco in the Red Sea port cities of Jizan and Yanbu. Yanbu serves as a vital export route for Saudi Arabia via the East-West pipeline, especially after the Strait of Hormuz was practically disrupted by the conflict.
In terms of market impact, the decline in oil prices indicates the market is beginning to shed some of its geopolitical risk premium following the lull in the US attack on Iran. If negotiations progress positively, Brent and WTI could potentially come under pressure again due to expectations of improving oil flows through Hormuz and the Red Sea. However, as long as key issues such as Iran's control of the Strait of Hormuz, its nuclear program, and the Houthi threat remain unresolved, oil prices remain vulnerable to a rebound and remain volatile. (asd)*
Source: Newsmaker.id
