Fuel prices drop sharply after Iran-US war pause

International

WITH the fighting between the US and Iran on a pause, oil prices dropped sharply.

In a report by BBC, Brent crude, the global benchmark for oil, dropped more than 9% to $87.59 a barrel at one point. The drop was a sharp turnaround from last week when oil rose above $100 per barrel.

The significant decline came after the US ambassador to the UN said attacks on Iran had been halted for a second night in a row.

The pause was meant to give “talks some space.”

The conflict in Iran led oil prices to increase sharply as the tension led to the closure of the Strait of Hormuz, a key shipping route which usually carries about 20% of the world's oil and liquefied natural gas.

Phe price of oil fell back to pre-war levels of around $70 a barrel when Iran and the US signed a memorandum of understanding in June to halt military operations and reopen the strait.

The collapse of the ceasefire earlier this month reignited fears over global energy supplies and caused oil prices to increase again.

Last week, oil prices hit $100 a barrel for the first time since May, with added concerns coming after Houthi militia in Yemen attacked oil tankers in the Red Sea.

The attack threatened a key export route that Saudi Arabia had used to bypass the Strait of Hormuz.(MyTVCebu)