On April 20, as the Middle East situation saw a phased easing and Iran announced the temporary reopening of the Strait of Hormuz, international oil prices tumbled sharply. WTI crude futures plummeted 11.2% to below $84 per barrel; Brent crude futures fell over 10% to around $88 per barrel, retreating sharply from highs above $100 per barrel hit earlier due to the strait blockade.

The sharp drop in oil prices was mainly driven by easing geopolitical tensions, with the U.S. and Iran restarting negotiations, significantly calming market fears of an energy supply crisis. The earlier closure of the Strait of Hormuz had disrupted global oil supplies, with the International Energy Agency warning of a severe energy crisis if the blockade lasted a week. As tensions eased, oil transportation gradually resumed, and plans by multiple countries to release strategic petroleum reserves further alleviated market jitters.

The steep fall in oil prices effectively eased global inflation rebound pressures, reviving market expectations for Federal Reserve rate cuts. Currently, markets put the probability of a Fed rate cut in September at over 50%, with the U.S. dollar index falling below 98.5 to a one-month low. Analysts pointed out that energy price fluctuations will continue to dominate global inflation expectations and monetary policy directions. If the Middle East situation remains stable, oil prices are likely to return to a reasonable range, creating room for loose monetary policies by global central banks.