International oil prices plunge 6% as U.S.-Iran tensions ease

[Financial News] International oil prices opened down about 6% in Asian trading on the 27th, as signs emerged that military tensions between the U.S. and Iran were easing.
At 7:32 a.m. Tokyo time on the 27th, Gulf News reported that West Texas Intermediate crude oil (WTI) was trading at $84.02 per barrel, down $5.29, or 5.92%, from the previous session. Brent Crude Oil was also down $5.90, or 6.1%, at $90.88.
The sharp drop came just after the energy market had experienced extreme volatility last week. Prices had surged to their highest levels in months amid fears that clashes involving Iran, the United States and Houthi rebels could block oil exports through the Strait of Hormuz and the Red Sea.
Investor sentiment improved after the U.S. government signaled that it would avoid further military action in order to leave room for diplomatic talks. That eased immediate concerns that the conflict could spread into a broader regional war.
Gulf News also reported that traders are reassessing the risk of supply disruptions and concluding that the impact may not be as severe as previously feared.
Market experts warn that the energy market could still react very sensitively depending on how events unfold in the Middle East. Oil exports continue, but attacks on Saudi Arabia's energy infrastructure and ongoing security threats in the Bab-el-Mandeb Strait continue to expose the fragility of the global oil supply chain.
If oil prices keep falling, it could help ease inflation concerns. However, experts say the decline could quickly reverse if energy infrastructure or transport routes are attacked again.
The International Energy Agency (IEA) has also warned that "although oil flows are recovering from earlier disruptions, the market remains vulnerable to renewed clashes in the Persian Gulf" and that "geopolitical risks continue to overshadow supply and demand fundamentals."

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