World oil prices collapsed by up to 10 per cent today as the United States and Iraq made final preparations for war, easing uncertainty over the conflict which had driven prices up.
Everything now points towards an easy US victory over the world's seventh largest oil exporter, dealers said, which they expected to cause only a brief disruption to supply.
International benchmark Brent crude oil slumped by as much as $3.08 per barrel, or 10 per cent, to a three-month low of $26.40. It later steadied at $27.45 per barrel by early afternoon in London, $2.03 or 6.9 percent down on the day.
US crude futures fell $2.40 to $32.53 per barrel, having touched a low of $31.75.
"The uncertainty is over. The market thinks we are going to war and we are going to win," said Mr Peter Gignoux of Schroder Salomon Smith Barney.
In late February, US crude prices peaked near $40 a barrel, a level not seen since the 1990-1991 Gulf crisis.
Today's collapse brought the four-day price fall on Brent to 20 per cent.
"The oil market is working on the basis there will be an overwhelming allied victory," said Sydney-based independent oil analyst Mr Simon Games-Thomas.