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Oil falls more than 9% as US and Iran pause attacks

Brent crude briefly sank to $87.59 a barrel after the US paused strikes for a second night, reviving hopes of de escalation, even as supplies risk remains.

Reported · Written up by our desk · Energy

Oil prices dropped sharply after the US said it paused attacks on Iran for a second night to allow “talks some space,” lifting expectations that tensions could cool. BBC Business reported that Brent crude, the global benchmark, fell more than 9% to $87.59 a barrel at one point, reversing last week’s move higher that pushed it above $100.

An Iranian army spokesperson also said Tehran halted “retaliatory” attacks in the region, signaling a possible easing that contrasts with the earlier spike in crude prices. The BBC said the Iran war had driven oil higher by effectively closing the Strait of Hormuz, a key shipping route for roughly 20% of the world’s oil and liquefied natural gas (LNG).

Last month’s memorandum between Iran and the US to halt military operations and reopen the strait helped oil slide back toward pre war levels around $70 a barrel, but a ceasefire collapse earlier this month brought renewed concerns. BBC Business added that Houthi militia attacks on oil tankers in the Red Sea last week also raised worries about export routes.

Even with the sharp sell off, uncertainty remains for energy markets, with gas prices still under pressure. BBC Business cited research from Wood Mackenzie saying European gas storage is at a historic low, and that if the Strait of Hormuz stays closed for two more months, storage could fall below 70% by 1 November versus a five year average of 90%.

Latest closeWTI crude $90.47 ▼1.9%|Brent $98.38 ▼2.3%|Nat gas $2.908 ▼0.3%

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