Oil Falls as Iran War Diplomacy Eases Hormuz Fears

Oil prices went down because investors saw signs that countries might be able to reduce fighting involving Iran.

Pakistan’s army chief visited Iran, and Iran and Oman discussed a plan for improving shipping through the Strait of Hormuz.

The United States announced new economic restrictions on Iran.

However, it did not immediately punish countries such as China for buying Iranian oil.

Because the measures were less severe than expected, traders did not think oil supplies would suddenly fall.

Diplomacy also made a wider military escalation seem less likely.

Oil is still much more expensive than it was at the beginning of the year.

This is because the war has disrupted energy shipping and attacks have damaged some Russian refineries.