Oil tumbles as US abandons plan for Iran strike - Bloomberg
Oil production (Photo: Getty Images)
Oil prices plunged after the US said it would not pursue an immediate military operation against Iran, reports Bloomberg.
According to the outlet, the market reacted with the biggest drop since June last year, as fears of major disruptions to energy supplies eased.
US benchmark West Texas Intermediate (WTI) crude fell 4.6%, slipping below $60 a barrel. Brent crude dropped 4.2% to $63.76 a barrel.
This move completely erased a five-day rally driven by fears of a potential US strike on Iran amid the harsh crackdown on anti-government protests, journalists note.
Despite easing tensions around Iran, other risks remain on the market. These include instability in Venezuela, restricted exports through the Caspian Pipeline Consortium terminal in the Black Sea due to infrastructure damage in Kazakhstan, and an unexpected surge in US crude oil inventories by 5.23 million barrels - all of which are weighing on prices.
Analysts expect oil prices to remain near current levels through the end of the week unless new tensions emerge between Washington and Tehran.
Oil price rebound
Earlier, global oil prices jumped by more than 2% amid escalating tensions in Iran and concerns about possible export disruptions, outweighing expectations of increased supply from Venezuela.
Brent crude futures rose by $1.60, or 2.5%, to $65.47 per barrel on Tuesday, January 13. US West Texas Intermediate (WTI) gained $1.65, or nearly 2.8%, to $61.15 per barrel.
Markets are also closely watching developments in Venezuela following the overthrow of President Nicolás Maduro. President Donald Trump said Caracas is ready to transfer up to 50 million barrels of oil currently under Western sanctions to the US, though additional supply could partially cap further price gains.
How global oil prices reacted to the US special operation in Venezuela - read more in the RBC-Ukraine report.
