Oil prices fall sharply on hopes of easing US-Iran tensions

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London: Oil prices dropped significantly after a brief pause in hostilities between the United States and Iran alleviated concerns about an immediate interruption to global energy supply and boosted hopes that shipping through the Strait of Hormuz might gradually restart.

Brent crude and US West Texas Intermediate both fell more than 6% in early trading, reversing some of the sharp gains seen during the battle. The Strait of Hormuz, through which a substantial portion of the world's oil and gas supplies flow, has been the focus of concerns about a broader energy crisis. Any prolonged interruption to the route can have raised expenses and impacted global petroleum supplies.

The US-Iran ceasefire has given markets some relief, with investors hopeful that negotiations will reduce tensions and allow commercial shipping to resume on the key waterway. However, uncertainty persists, and oil prices may stay volatile if the deal fails or new attacks threaten shipping and energy infrastructure.