Oil prices dropped sharply on Monday after Iran’s limited response to U.S. airstrikes and the announcement of a ceasefire between Iran and Israel eased concerns over potential disruptions to global oil supplies.
Following U.S. airstrikes on Iranian nuclear facilities, Iran launched missiles at the Al Udeid Air Base in Qatar. All missiles were intercepted, and no casualties were reported. The absence of significant damage or escalation led to a 7.2% decrease in oil prices, with U.S. benchmark crude settling at $68.51 per barrel after briefly exceeding $78.
President Trump characterized Iran’s response as “a very weak response,” noting that Iran had provided advance notice of the attack. He expressed hope that this would mark the end of hostilities.
Subsequently, President Trump announced a phased-in ceasefire between Iran and Israel, set to commence within 24 hours. The agreement aims to halt the 12-day conflict that had heightened fears of a broader regional war and potential disruptions to oil shipments through the Strait of Hormuz, a critical chokepoint for global energy supplies.
Despite Iran’s earlier threats to close the Strait of Hormuz, which handles about 20% of the world’s oil supply, the waterway remains open. Analysts suggest that Iran’s limited military response and the ceasefire agreement have reduced the immediate risk of significant supply disruptions.
