Oil Prices Plunge Amid Middle East De-Escalation Hopes

Crude oil prices dropped sharply on June 23, with West Texas Intermediate (WTI) falling by 7.3 percent to below $69 per barrel and Brent crude declining by nearly 7 percent to under $71 a barrel. The decline followed investor optimism that Iran’s limited retaliation in response to U.S. missile strikes on its nuclear sites could lead to a de-escalation in the Middle East. Natural gas prices also fell by 4 percent to $3.70 per million British thermal units (Btu).
Markets showed a “knee-jerk reaction” to the conflict, with U.S. equity indices rising despite concerns over global oil supply risks. The Dow Jones Industrial Average surged by 300 points, while the S&P 500 and Nasdaq Composite both advanced by around 0.8 percent. Yields on Treasury securities dropped across the board, reflecting greater prospects of a July interest rate cut by the Federal Reserve.
Analysts noted that investors were pricing in risks related to the Strait of Hormuz, a critical waterway for global oil trade. However, markets appeared resilient, with traders buying dips at any opportunity. The outlook for inflation and economic data, including the final first-quarter GDP estimate and personal income and spending reports, will likely influence market sentiment in the coming days.

Published: 6/23/2025