Oil Plummets 7% on Iran Ceasefire Signals

Oil markets saw a dramatic pullback as Brent crude and West Texas Intermediate both fell over 7 percent. Brent dipped to a low of 90.90 dollars a barrel while West Texas Intermediate touched 84 dollars. This sudden drop comes after nearly two weeks of rising tensions in the Middle East, offering some relief to global markets after prices recently sat above 100 dollars.

The shift began when a senior Iranian official told reporters that Tehran plans to stop its operations as long as the United States maintains its bombing pause. Washington paused the strikes after 13 consecutive nights, following warnings from advisers that military targets and weapons supplies were running low. US Ambassador to the United Nations Mike Waltz stated that President Donald Trump chose the pause to give diplomacy a chance to work.

Market watchers are also keeping a close eye on how energy costs impact broader economic policy. Strategists note that expensive oil recently revived bets that the Federal Reserve might keep interest rates high to fight inflation. While inflation expectations remain steady for now, traders are watching closely to see if the current oil price drop will hold through the rest of the week.