Oil Prices Plummet Amid Tensions Over U.S.-Iran Peace Talks
Oil prices dropped nearly 6% as hopes rose for a U.S.-Iran peace deal to reopen the Strait of Hormuz. Despite diplomatic talks in Doha, officials were cautious about an imminent resolution. Analysts warn that normal crude flows will take time due to existing supply shortfalls and infrastructure damage.
Oil prices fell nearly 6% to two-week lows on Monday, driven by growing optimism for a U.S.-Iran peace deal that might reopen the Strait of Hormuz. However, Washington and Tehran have downplayed the likelihood of an imminent diplomatic breakthrough.
Brent crude futures dropped $6.12 to $97.42 a barrel, while U.S. West Texas Intermediate futures fell $5.72 to $90.88. Both contracts marked their lowest trading since early May, amid low trading volumes because of the U.S. Memorial Day holiday.
Analysts caution that even with a peace deal, normal oil flows will be delayed. Damaged oil and gas facilities, along with ongoing negotiations, mean it could take months to resume regular operations. The supply shortfall continues as the market remains dependent on Middle Eastern crude production.
(With inputs from agencies.)
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