Brent Oil Plunges, Conflict Pause Eases Supply Risks
Brent oil prices fell sharply on Monday, hitting US$87.60 per barrel. After paring some losses, Brent traded around US$90.80 per barrel.
The price decline was triggered by easing tensions between the United States and Iran. Washington halted attacks, while Tehran stated it had held off on retaliatory action.
Iran also held talks with Oman regarding the Strait of Hormuz. These developments helped ease concerns about disruptions to oil shipments from the Middle East.
Supply conditions also improved after oil loading resumed at the Caspian Pipeline Consortium terminal on Russia's Black Sea coast. The terminal is a crucial export route for Kazakh oil.
Despite the sharp correction, Brent has still rallied nearly 25% so far this month. Prices had previously surged after supply disruptions spread from the Strait of Hormuz to the Red Sea.
Market risks have not completely dissipated after the Houthi group claimed attacks on Saudi Aramco-related facilities in Jizan and Yanbu. As long as the conflict remains subdued, oil prices have the potential to continue their correction, but could rise again if supply disruptions intensify.
Source: Newsmaker.id