FX.co ★ WTI Oil Retreats as Iran Signals De-escalation

On Monday, WTI crude oil futures experienced a 1.7% decline, closing at $71.80 per barrel. This drop comes after a substantial 7% increase observed on Friday, influenced by reports that Iran was opting to ease tensions with Israel and revive nuclear discussions. The overnight period saw prices peak at $77.49 as a result of Israeli military actions targeting Iran's South Pars gas field and an oil storage facility near Tehran. However, market sentiment stabilized with optimism that the conflict might remain confined, ensuring no significant harm to vital energy infrastructure or major shipping lanes. The passage through the Strait of Hormuz showed only a minor reduction, with 111 ships on June 15 compared to 116 on June 12, indicating negligible disruptions to oil transport. Analysts predict that the conflict will be of short duration, restraining further price surges. Nonetheless, potential risks persist as Iran has threatened to close the Strait of Hormuz—a crucial artery for approximately 20% of the world's oil supply—a maneuver that could drive prices above $100 per barrel.