West Texas Intermediate crude oil slumped to $85 per barrel in early Asian trading Friday, marking its lowest level since mid-April as geopolitical risk premiums evaporated. The sharp decline followed President Donald Trump’s announcement of a settlement agreement with Iran, signaling a potential end to Middle East conflict that has kept energy markets on edge for months.
The black gold’s retreat coincided with simultaneous US dollar weakness as traders rapidly unwound war-premium positions across both commodities and currencies. Energy traders who had built long positions anticipating supply disruptions now face immediate pressure as peace prospects eliminate the geopolitical risk component from crude pricing.
The synchronized selloff in both oil and the greenback reflects broader market repositioning as safe-haven demand crumbles. Brokers should expect increased volatility as leveraged positions unwind, while physical oil markets may need to recalibrate pricing based on fundamental supply-demand dynamics rather than conflict scenarios.
FXnCO Insight
Traders holding long WTI positions should evaluate stop-loss levels immediately as further downside toward $80 becomes increasingly likely if the Iran settlement materializes.
Source: FXStreet