Oil prices drop more than 2% as a pause in U.S.-Iran hostilities raises de-escalation hopes
Oil prices extended their losses Tuesday after a pause in fighting between the U.S. and Iran held, raising hopes for a de-escalation in the Middle East...
Key points
- Oil prices extended their losses Tuesday after a pause in fighting between the U.S.
- and Iran held, raising hopes for a de-escalation in the Middle East conflict that has upended energy supplies.
- While Tehran has rejected reports that it has agreed to a 10-day ceasefire with the U.S., there has been a temporary pause in hostilities.
- The Commonwealth Bank of Australia said on Tuesday that recent decline in oil prices reflects easing concerns over an immediate escalation between the U.S.
What happened
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Oil prices extended their losses Tuesday after a pause in fighting between the U.S. and Iran held, raising hopes for a de-escalation in the Middle East conflict that has upended energy supplies. While Tehran has rejected reports that it has agreed to a 10-day ceasefire with the U.S., there has been a temporary pause in hostilities. The Commonwealth Bank of Australia said on Tuesday that recent decline in oil prices reflects easing concerns over an immediate escalation between the U.S. and Iran, but cautioned that risks to global energy supplies remain elevated. While "a pause in US Iran hostilities appears to have weakened expectations that the conflict will escalate to include significant attacks on civilian and energy infrastructure," the bank said in a note, warning that disagreements over the vital Strait of Hormuz shipping lane "could see hostilities reignite."