Oil prices drop sharply after tensions ease
Oil and gas prices dropped sharply on Friday after signs of easing tensions in the Middle East raised hopes of stable supply. The sudden decline comes as fears over disruptions begin to fade.
According to Iran, the crucial shipping route through the Strait of Hormuz is now open again, at least during the current ceasefire period. This development allows oil tankers to pass freely, reducing concerns about supply shortages.
The impact on oil prices was immediate. A barrel of Brent crude fell to around $91, marking a drop of more than 8% compared to the previous day. At one point, prices even dipped below the $90 mark, while US oil also saw significant declines.
This marks a sharp reversal from recent months. During heightened tensions in March, oil prices had surged to nearly $120 per barrel, compared to around $70 before the conflict began.
Gas prices in Europe also followed the downward trend. The benchmark TTF price fell by more than 9% to approximately €38.5 per megawatt hour, a significant drop from peaks of around €74 recorded in March.
The main reason behind the price decline is the renewed accessibility of the Strait of Hormuz, one of the world’s most vital oil transport routes. With tankers moving freely again, fears of supply disruptions have eased, leading to lower energy prices.