Oil Retreats After Halt in Military Escalation Between US and Iran

Oil prices registered a significant decline today, Monday, reaching their lowest level in a week. This followed the halt in the exchange of attacks between the United States and Iran earlier this week, an escalation that had lasted for about two weeks. This development boosted hopes for a diplomatic path that could lead to de-escalation and the resumption of normal navigation through the Strait of Hormuz. Brent crude futures saw a decrease of $7.55, or approximately 7.8 percent, settling at $89.23 per barrel by 11:02 GMT. U.S. West Texas Intermediate (WTI) crude also fell by $6.01, equivalent to 6.73 percent, recording $83.30 per barrel. Both contracts are thus trading at their lowest levels since July 20. Brent crude price had previously reached $100 per barrel as the crisis extended to the Red Sea, affecting Saudi Arabia's exports to Asia via the Bab al-Mandab Strait. U.S. Ambassador to the United Nations, Mike Waltz, indicated in statements to American media that President Donald Trump decided to temporarily halt the attacks to allow more time for diplomatic efforts. Ole Hvalby, an analyst at SEB Research, commented: "There is no signed framework, no verification mechanism, and no agreed-upon timetable; all we observe is that both sides have ceased fire since last Friday." In separate data, shipping firm Kpler revealed that fewer than ten vessels carrying commodities passed through the Strait of Hormuz daily earlier this week. Hvalby reported that "flows have fallen to about 15 percent of pre-crisis levels, compared to a normal operating rate of about 20 million barrels per day of crude oil, condensates, and petroleum products." In another development, an informed source in the oil sector stated today, Monday, that Kazakhstan reduced its daily oil production by more than half, following the closure of its main export terminal on the Black Sea due to drone attacks. Kazakhstan is among the top ten oil-producing countries globally. Later, the Ministry of Energy announced the resumption of oil loading operations at the Caspian Pipeline Consortium terminal, located on the Black Sea.