Donald Trump has called off planned US military strikes on Iran, sending international oil prices lower as expectations for a peace deal resurfaced. Benchmark Brent crude fell nearly 7 per cent yesterday to trade at around $84.14 a barrel, after touching a low of $81.55 earlier in the day.
The drop marks a sharp reversal from last month, when prices surged back above $100 a barrel following the outbreak of fighting between the two sides. Recent attacks on oil tankers in the Strait of Hormuz had previously renewed fears of a fresh fuel supply crunch.
Trump announced on social media over the weekend that a looming US strike, which he described as the "biggest attack since World War II," had been called off in hopes of reaching a peace deal "rapidly" with Tehran. The proposed deal would include agreements over the future of Iran's nuclear programme and the full reopening of the strait.
Economic Impact
The decline in global energy prices is expected to ease upward pressure on inflation across global economies. Lower inflation reduces the need for central banks to implement further interest rate increases, providing financial relief for mortgage borrowers.
Falling fuel costs will also spare households and drivers from fresh increases in energy bills and petrol pump prices.
