FX.co ★ Oil Tumbles 5%

WTI crude oil futures plummeted approximately 5% to around $59.1 per barrel on Thursday, marking the largest decline since October. This drop followed indications that the immediate threat of a US military strike on Iran had diminished. President Donald Trump announced that he had received commitments from Iranian authorities to halt the killing of protesters, thereby reducing the likelihood of imminent military action and easing concerns over potential disruptions to Iran's oil production and crucial shipping lanes. Just a day before, markets were on edge, anticipating possible military action as Iran temporarily closed its airspace and reports surfaced regarding movements of US troops in the region. With the reduction in hostilities, the geopolitical risk premium that had previously bolstered oil prices dissipated rapidly. Earlier in the year, oil prices had surged due to unrest in Iran, OPEC's fourth-largest producer, along with instability in Venezuela and disruptions to Kazakh exports in the Black Sea, attributable to drone attacks, maintenance issues, and adverse weather conditions. President Trump also expressed his opinion that Venezuela should maintain its membership in OPEC.