Brent crude oil tumbles below $66, first time in 3 weeks
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The decrease has reversed gains following US and Israeli strikes on Iran.
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The Marathon Garyville Oil Refinery in Reserve, La., is seen Monday, April 7, 2025. (AP)
Global oil prices plunged nearly 6% on Tuesday, with Brent crude falling below $66 a barrel for the first time since June 6, market data showed.
Global oil prices experienced a sharp decline, with September Brent crude futures dropping 6.4% to $66.01 per barrel as of 16:58 GMT compared to the previous close, after briefly falling below the $66 mark for the first time since June 6, while August WTI futures also saw a significant decrease of 6.32%, reaching $64.18.
Previously, oil prices surged to their highest levels since January on June 23 after US airstrikes hit Iran's nuclear facilities, sparking fears of an expanding regional war and potential disruptions to global crude supplies.
Oil prices see massive surge amid US strikes on Iran
Brent crude futures gained $1.52 (1.97%) to trade at $78.53 per barrel by 0503 GMT while US West Texas Intermediate (WTI) crude rose $1.51 (2.04%) to $75.35, after both benchmarks had earlier surged more than 3% during the session to hit five-month peaks of $81.40 for Brent and $78.40 for WTI before retreating modestly from those highs.
The 6% price drop closely follows the ceasefire established between Iran and "Israel" on June 24, easing concerns regarding Iran's potential closing of the Hormuz Strait, which would choke global oil shipments.
Oil prices surged over 9% on June 13, climbing to their climax in almost five months following the first strikes launched by the Israeli occupation on Iranian territory, which intensified concerns about an escalating conflict in the Middle East and potential disruptions to global oil supplies.
The US and Israeli strikes and the looming threat of broader regional war raised concerns about a potential shutdown of the Strait of Hormuz, a critical passage for nearly 20% of global crude shipments. Given Iran's position as OPEC's third-largest oil producer, analysts cautioned that any disruption to the vital waterway could have triggered a sharp spike in worldwide oil prices.
“The current geopolitical escalation provides the fundamental catalyst for Brent prices to traverse higher and potentially spiral towards $100, with $120 per barrel appearing increasingly plausible,” Sugandha Sachdeva, founder of research firm SS WealthStreet in New Delhi, stated.
China can buy oil from Iran: Trump
In a related development, Trump suggested that China might maintain its oil purchases from Iran, which analysts interpreted as a possible relaxation of pressure on Tehran despite existing US sanctions designed to penalize such transactions.
"China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the US, also," Trump said on Truth Social before heading to the Hague on June 24th.
China is Iran's primary buyer of oil, purchasing over 90% of Iran's oil exports and taking in roughly 1.3 million barrels per day in April, a slight drop from March's five-month high, according to Kpler data.
