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Oil Prices Sink as US-Iran Tensions Show Signs of Easing
(MENAFN) Crude markets extended their steep slide Tuesday as fresh signals of de-escalation between Washington and Tehran eased investor fears over a wider Middle East conflict and the supply shocks it could trigger.
Brent crude, the international benchmark, tumbled more than 6.5% to roughly $86.2 a barrel as of 2020 GMT, building on a 2.4% drop logged the previous session. The West Texas Intermediate (WTI) benchmark used in the US mirrored the slide, shedding 5.5% to settle at $80.40 a barrel.
The sell-off intensified as traders weighed a fresh round of diplomatic maneuvering aimed at defusing the standoff between the two governments. Pakistan's army chief traveled to Tehran to back mediation efforts, while Qatar confirmed it remained actively engaged in shuttle diplomacy between the two sides.
Adding to the shift in sentiment, reports emerged that Washington may soon reinstate diplomatic staff previously pulled from the region — a move markets read as a sign that the risk of imminent military escalation had diminished.
Momentum behind the price drop picked up further after Washington's latest round of economic pressure on Iran turned out to be milder than traders had braced for. US Treasury Secretary Scott Bessent said nations still doing business with Tehran would be granted a window to unwind those ties before facing unilateral sanctions, rather than facing immediate punitive action.
That phased rollout defused fears that the US was preparing to choke off Iranian oil exports overnight.
Adding to the bearish tone, tanker traffic through the Strait of Hormuz — the vital chokepoint for global energy shipments — has largely continued uninterrupted, even as some vessels reportedly reroute or obscure their movements. That sustained flow has calmed immediate worries about a severe supply crunch, compounding the downward pressure on prices.
Brent crude, the international benchmark, tumbled more than 6.5% to roughly $86.2 a barrel as of 2020 GMT, building on a 2.4% drop logged the previous session. The West Texas Intermediate (WTI) benchmark used in the US mirrored the slide, shedding 5.5% to settle at $80.40 a barrel.
The sell-off intensified as traders weighed a fresh round of diplomatic maneuvering aimed at defusing the standoff between the two governments. Pakistan's army chief traveled to Tehran to back mediation efforts, while Qatar confirmed it remained actively engaged in shuttle diplomacy between the two sides.
Adding to the shift in sentiment, reports emerged that Washington may soon reinstate diplomatic staff previously pulled from the region — a move markets read as a sign that the risk of imminent military escalation had diminished.
Momentum behind the price drop picked up further after Washington's latest round of economic pressure on Iran turned out to be milder than traders had braced for. US Treasury Secretary Scott Bessent said nations still doing business with Tehran would be granted a window to unwind those ties before facing unilateral sanctions, rather than facing immediate punitive action.
That phased rollout defused fears that the US was preparing to choke off Iranian oil exports overnight.
Adding to the bearish tone, tanker traffic through the Strait of Hormuz — the vital chokepoint for global energy shipments — has largely continued uninterrupted, even as some vessels reportedly reroute or obscure their movements. That sustained flow has calmed immediate worries about a severe supply crunch, compounding the downward pressure on prices.
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