Oil Plunges 5 Percent as Israel, Iran Agree to Halt Attacks
Brent crude, the international benchmark, slid roughly 5% to approximately $90.85 per barrel — its weakest level since March — while U.S. benchmark West Texas Intermediate dropped more than 5% to around $87.59 per barrel.
The selloff was triggered after Israeli Prime Minister Benjamin Netanyahu announced a pause in strikes against Iran, while cautioning that Israel reserved the right to retaliate should Tehran resume offensive action. Iranian state media reported a comparable posture on its side, pointing to a fragile but tangible halt in the exchange of attacks between the two nations.
U.S. President Donald Trump added to the optimistic tone, saying this week that negotiations had entered their final stage and that a definitive outcome could crystallize within days. He further suggested the U.S. could declare "total victory" in the conflict within two weeks.
On the energy infrastructure front, U.S. Energy Secretary Chris Wright said Tuesday that vessel traffic through the Strait of Hormuz — a critical artery for global oil flows — was increasing "very meaningfully," a signal that one of the conflict's most alarming economic threats was receding.
Despite the sharp pullback, crude prices remain above pre-war levels, with traders cautious about declaring a full reversal while regional stability and shipping security remain unresolved.
Demand-side dynamics compounded the downward pressure. China's crude imports fell to approximately 7.8 million barrels per day last month — the lowest reading in more than eight years and nearly 4 million barrels per day below the 2025 average — underscoring weakening appetite from the world's single largest oil consumer.
The combination of softening Chinese demand, record U.S. crude exports, and coordinated emergency reserve releases from major economies has collectively cushioned the market against an even sharper price spike during the height of the conflict.
Market participants are closely watching whether the ceasefire holds. Any renewed escalation involving key regional producers or a fresh disruption to critical shipping lanes could rapidly reignite supply anxieties and push prices higher once again.
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