NEW YORK: Oil prices dropped about 10 per cent to a one-week low on Monday after US President Donald Trump said he would postpone any military strikes against Iranian power plants for five days after constructive talks to resolve the hostilities in the Middle East, hours ahead of a deadline that threatened further escalation in the four-week-old war.
Brent futures fell $11.17, or 10.0pc, to $101.02 a barrel at 10:46 a.m.
EDT (1546 GMT), while US West Texas Intermediate (WTI) lost $9.28, or 9.5pc, to $88.95.
Extreme price changes in recent weeks - Brent closed at its highest since July 2022 on Friday - boosted both crude benchmarks’ historic or actual 30-day close-to-close futures volatility to the highest levels since April 2022.
The war has already damaged major energy facilities in the Gulf and effectively halted shipping through the Strait of Hormuz, which handles about 20pc of global oil and liquefied natural gas flows.
Two tankers bound for India sailed through the Strait of Hormuz on Monday carrying liquefied petroleum gas (LPG) loaded in the United Arab Emirates and Kuwait, although overall traffic through the critical waterway remained blocked.
Analysts have estimated a loss of 7 million to 10 million barrels per day (bpd) of Middle East oil production.
The crisis in the Middle East is worse than the two oil shocks of the 1970s put together, Fatih Birol, executive director of the International Energy Agency (IEA), said on Monday.
The supply crunch has led to a temporary waiver of US sanctions on Russian and Iranian oil already at sea.
Indian refiners plan to resume buying Iranian oil, while refiners elsewhere in Asia are considering the move, traders told Reuters.
Energy Secretary....
