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Brent crude on track for worst monthly drop since 2020, trading below 94 dollars a barrel
Brent crude oil is on track for its worst monthly decline since 2020, falling below 94 dollars a barrel. The drop is driven by potential optimism around a US-Iran peace deal and broader concerns about global demand.
Brent crude oil is on track to record its worst monthly decline since 2020, with prices falling below 94 dollars a barrel in Asian trading. The benchmark is down more than five-tenths of a percent in the latest session, extending a steep monthly slide that has caught energy markets off guard.
The decline is partly driven by growing optimism around a potential peace deal between the United States and Iran. Reports of a tentative framework to extend the ceasefire by 60 days have raised hopes that Iranian oil could eventually return to global markets in larger volumes, putting downward pressure on prices.
The prospect of the Strait of Hormuz being reopened to unrestricted shipping has also contributed to the bearish sentiment. The strategic waterway, through which roughly a fifth of the world's oil passes, has been a flashpoint during the US-Iran conflict, and its reopening would significantly ease supply concerns.
Beyond the Iran factor, analysts point to broader concerns about global oil demand as economic growth shows signs of moderating in several major economies. The Bloomberg Dollar Index was marginally higher in Asian trading, adding further headwinds for dollar-denominated commodities like oil.
The sharp decline marks a dramatic reversal from earlier in the year when oil prices had surged due to supply disruptions related to the US-Iran conflict. If Brent finishes the month at current levels, it would represent the steepest monthly drop in over six years, Bloomberg reported.