WASHINGTON (dpa-AFX) - Crude oil price fell sharply on Monday despite rising earlier in the session after reports of Iran signaling its readiness to end the hostility with Israel emerged. The scare of the Israel-Iran conflict expanding - at least for now - has abated.
WTI oil for July delivery closed down by $1.21 to settle at $71.77 per barrel today. August Brent crude was last seen down by $1.08 at $73.15 per barrel.
Last Friday, oil price skyrocketed around 7% after the Israel- Iran conflict erupted.
With each nation attacking other's civilian, military, and infrastructure sites with a barrage of drones and ballistic missiles, apprehension about major powers joining the conflict and escalating the situation to a war loomed large.
However, even as exchange of airstrikes continued today, the Wall Street Journal reported that Iran has sent messages via intermediaries to the US and Israel stating its readiness end the hostility and re-start nuclear talks. Traders felt that the situation may soon be contained.
Furthermore, OPEC+ members already have excess capacity to replace any disruption in oil supply in the Persian Gulf.
Last week, the threat of damage to the Strait of Hormuz during the attacks lingered, sending oil prices sharply higher. This strait remains an important chokepoint for ships, as it handles around 20% of global oil trade.
However, with reports that 111 ships passed through the strait yesterday compared to 116 on June 12th, clearly no major disruption to oil flow has been seen.
With tension slightly easing, investors booked profits from last week's surge. As a result, oil prices subsided sharply today.
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