Oil prices dropped sharply on Sunday after the United States and Iran refrained from military strikes in the Persian Gulf for a second straight day, easing weeks of fears over disrupted crude supplies through the Strait of Hormuz.
Brent crude for September delivery fell 4.9% to $92.02 a barrel, while the more actively traded October contract dropped 4.6% to $87.48. US benchmark crude slid 5.6% to $84.34. The declines mark a sharp reversal from last week, when Brent briefly spiked to $102 a barrel — its highest level since May and roughly $30 above prices seen earlier in the month.
The relief hasn't reached drivers yet: average US gasoline prices stood at $4.11 a gallon on Sunday, up from $3.90 a month ago and $3.15 a year earlier. Traders are also watching the Federal Reserve, pricing in a 36% chance of a rate hike at its next meeting, as the conflict's inflationary ripple effects linger even as the immediate military threat cools.