Oil slumped over 7% as Iran’s measured response calms supply fears
The slump effectively erased the war-risk premiums accumulated over the past 10 days, returning both benchmarks to levels last seen on 12 June
Global crude oil benchmarks plunged on Monday, 23 June, as market jitters eased following Iran’s relatively restrained response to recent US military strikes—an action that notably spared key energy infrastructure. The development allayed investor fears of an imminent supply shock from the Middle East, triggering a sharp selloff across the futures markets.
Brent crude futures settled $5.53, or 7.2%, lower at $71.48 a barrel,
WTI matched the slide, also dropping $5.53, or 7.2%, to close at $68.51 per barrel.
The slump effectively erased the war-risk premiums accumulated over the past 10 days, returning both benchmarks to levels last seen on 12 June—just before Israel’s initial strikes on Iran.
Traders had initially feared that Iran’s retaliation could target the Strait of Hormuz, a strategic chokepoint responsible for around 20% of the world’s seaborne oil trade. However, Tehran’s response steered clear of the crucial shipping corridor and energy-producing assets, easing immediate concerns over regional supply disruption.
While the latest round of tension appears to have stabilised for now, analysts warned that the threat of supply disruption still looms large amid a fragile and volatile backdrop.
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