Oil Back to $60 as Geopolitics Fade

Oil prices have tumbled back toward $60 per barrel.

- WILSON SY

This is a dramatic reversal from the crisis-driven surge that gripped markets just two months ago. Back then, analysts were predicting a worst-case scenario of $120 crude as Israel launched airstrikes against Iran.

West Texas Intermediate (WTI) crude fell to $62.095 per barrel last Friday, while Brent crude declined to $65.615 per barrel. Both showed significant declines from their June peaks.

The retreat reflects not only an easing of geopolitical tensions but also shows the market's growing recognition of fundamental oversupply pressures that geopolitical premiums had temporarily masked.

From crisis to calm

The oil rally began on June 13 when Israel launched unprecedented strikes on Iran's nuclear facilities. This sent crude futures jumping $5 a barrel that day with WTI oil surging 7.3 percent to $72.98 per barrel and Brent gaining seven percent to around $74.23 per barrel. Analysts at the time warned that oil prices could surge to $120 per barrel if the Israel-Iran conflict damaged Iranian oil infrastructure or impeded passage through the Strait of Hormuz.

The crisis deepened when the US joined and launched its own strikes against Iranian nuclear facilities. President Trump's demand for "unconditional surrender" from Tehran pushed WTI crude and Brent to as much as $78.21 and $81.50 per barrel, respectively.

Worst-case fears failed to materialize