&imwidth=800&imheight=600&format=webp&quality=medium "Oil drops below $80 for first time since war began as US-Iran peace hopes grow")
For the first time since the start of the war in West Asia, oil prices have slipped below the $80-a-barrel mark. This comes after the United States and Iran announced that they have reached an agreement to end the war. International benchmark Brent crude settled at $78.96 a barrel on Tuesday, down 5.1 per cent, while US benchmark West Texas Intermediate fell 5.8 per cent to $76.05. The sharp decline came as markets grew increasingly confident that the Strait of Hormuz, one of the world's most important oil shipping routes, may soon return to normal operations.
Also read | 'Let the oil flow': Crude prices down to $81.15 as US, Iran announce 'immediate end' to hostilities
US to ease sanctions on Iranian oil?
The oil price slide accelerated to over five per cent after the Wall Street Journal reported that Washington could ease sanctions on Iranian oil exports as part of the broader agreement to end the conflict. Such a move would allow Tehran to resume large-scale sales of crude and refined petroleum products, potentially increasing global supplies at a time when traders had been bracing for prolonged disruption.
The Strait of Hormuz is at the centre of the crisis. After the war started on February 28, Iran moved to restrict maritime traffic in the waterway which handles roughly a fifth of the world's oil trade.
While a formal peace agreement has yet to be signed, early signs of normalisation are already emerging. Iranian media reported that three oil tankers and two cargo vessels had successfully transited the strait, a development that helped calm markets.
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That does not mean the crisis is over. Shipping companies and energy analysts continue to warn that restoring full operations will take time. Insurance costs remain elevated, vessel traffic has not returned to pre-war levels and questions remain about the long-term implementation of the ceasefire.
Inflation expected to fall
The easing of oil prices has also boosted hopes that inflation pressures could begin to moderate. European stock markets closed higher on Tuesday, while the Dow Jones Industrial Average notched another record close in the United States.
Disclaimer: WION takes utmost care to accurately and responsibly report ongoing conflicts in West Asia involving Israel, Iran, US, Gulf nations and non-state actors like Hezbollah, Hamas, Houthis, Islamic State, and others. Claims and counterclaims, disinformation and misinformation are being made online and offline. Given this context, WION cannot independently verify the authenticity of all statements, social media posts, photos and videos.
