Oil prices
Oil prices dropped quickly at the start of the week after a strong rise in the previous days. Prices for West Texas Intermediate (WTI) crude oil fell to about $94 per barrel, a decline of nearly 8% in about 12 hours. The global benchmark Brent crude also declined and traded near $97 per barrel. The fall reversed part of last week’s rally when oil prices moved close to $100. Analysts say traders who bought oil earlier started selling to secure profits once prices rose sharply. This selling pressure pushed prices down.
Geopolitical tensions
The main reason for the earlier price rise was tension around the Strait of Hormuz. This narrow sea route connects the Persian Gulf to global markets and carries about one-fifth of the world’s oil supply. Investors were worried that tensions between the US, Israel, and Iran could affect oil shipments through the strait. Any disruption there could reduce supply and push prices higher. However, the market mood changed after remarks from President Donald Trump. He said countries that depend heavily on this route should also help protect it. He pointed out that major importers such as China benefit from the oil flow through the corridor.
Impact
The sharp movement in oil prices also affected financial markets. Major US stock indices, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, recently saw declines as investors reacted to uncertainty in energy markets. Commodity markets also reacted. Prices of gold fell after rising earlier during the geopolitical tensions. Stock markets in Asia and Europe showed mixed trends. China’s Shanghai Composite Index (SCI) declined slightly, while Hong Kong’s Hang Seng Index (HSI) gained during the session. In Europe, indices such as the FTSE 100, DAX, and CAC 40 recorded moderate gains.
Experts' say
Experts say the oil market could remain unstable in the coming days. The situation in the Middle East is still developing, and any escalation could again affect oil supply routes. At the same time, data from the US Department of Commerce showed that inflation slowed slightly in recent months. The Federal Reserve System is also expected to review interest rates soon.
