WTI, Brent Crude Fall Amid Middle East Escalation, Strait of Hormuz Risks

Oil prices experienced significant volatility amid escalating tensions and subsequent de-escalation efforts between Israel and Iran. Initial Israeli airstrikes on Iranian facilities triggered a sharp surge in crude prices, with WTI crude briefly surpassing $77 per barrel due to fears of supply disruptions, particularly through the critical Strait of Hormuz. However, reports of Iran seeking to de-escalate the conflict and resume nuclear negotiations helped temper market fears, leading to a retreat in prices back to around $71.80 per barrel. Market participants remain cautious, as the Strait of Hormuz remains open but the possibility of its closure by Iran poses ongoing risks that could push oil prices above $100 per barrel. President Trump has encouraged negotiations between the conflicting parties, hoping to stabilize the region and oil markets. Overall, while geopolitical developments have caused sharp price swings, sustained changes in oil prices will depend on actual shifts in market fundamentals and the outcomes of diplomatic efforts.