Oil Prices Remain 30% Higher Despite US-Iran Ceasefire
Brent crude oil futures dropped 14% to $94 per barrel following the announcement of a two-week ceasefire agreement between the US and Iran. US energy stocks tumbled in premarket trading: Exxon Mobil shed 6%, Chevron dropped 4.8%, and Occidental Petroleum lost 8.3%. This decline follows expectations that energy supplies through the Strait of Hormuz—which typically handles one-fifth of global oil oil trade—will resume. Despite the drop, oil prices remain 30% higher than pre-war levels. Shipping logjams in the Strait of HormuzL will take at least 10 days to clear. Damaged oil production hubs may take back online in four to six weeks. Capital Economics expects oil prices to hover around $95 through the second quarter before falling to $80 by year-end.
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