Key Moments
- Brent crude futures fell 1.7% to $90.99 a barrel and WTI declined 1.8% to $85.20 a barrel at 0759 GMT.
- Trump indicated he would refrain from additional strikes on Iran “at this point” while maintaining a naval blockade in the Strait of Hormuz.
- Brent has dropped about 22% from a six-month high of $118 reached on October 30 as fears of intensified US action against Iran have eased.
Market Reaction to US-Iran Tensions
Oil prices moved lower on Tuesday, extending the previous session’s declines after US President Donald Trump played down the likelihood of further immediate military action against Iran, which reduced worries over prolonged disruptions to Middle East supply.
At 0759 GMT, Brent crude futures were down 1.7% at $90.99 a barrel, while US West Texas Intermediate (WTI) futures slipped 1.8% to $85.20 a barrel. Both benchmarks had already lost about 2% in the session.
In the prior trading day, Brent settled 5.85% lower after dropping to its weakest level since August 31.
Price and Performance Snapshot
| Contract | Price | Move in Current Session | Recent Performance Detail |
|---|---|---|---|
| Brent crude futures | $90.99 per barrel | -1.7% at 0759 GMT | Settled down 5.85% in previous session; lowest since August 31 |
| WTI futures | $85.20 per barrel | -1.8% at 0759 GMT | Both benchmarks had fallen about 2% in the session |
| Brent six-month high | $118 per barrel | – | Brent has retreated about 22% from October 30 peak |
Trump’s Position on Iran and Strait of Hormuz
Trump said on Monday that he intends to delay any new strikes against Iran for now, citing appeals from regional states, including a request from Qatar’s prime minister during talks at the White House.
In comments given to Reuters and in subsequent remarks at the White House press briefing room, Trump stated that he plans to maintain a naval blockade in the Strait of Hormuz for the time being.
“The market continues to prioritise President Trump’s more conciliatory tone toward Iran since the midterms,” said Tim Waterer, chief market analyst at KCM Trade.
“While attacks on shipping around the Strait of Hormuz are still occurring, they have not escalated in a way that has forced a fresh risk premium into the market,” he said.
OPEC Output and Supply Dynamics
On the production front, a Reuters survey showed that OPEC oil output rose in October, driven by higher supply from Saudi Arabia, Kuwait and Iraq, even as export limitations persisted.
Against this backdrop, Brent has fallen about 22% from the six-month high of $118 reached on October 30. The pullback comes as earlier expectations that Trump might intensify strikes on Iran after the US midterms have moderated, although apprehension over potential shipping disruptions remains.
Risk Premiums and Geopolitical Uncertainty
“Despite the recent selloff, prices are unlikely to fall below $90 per barrel for Brent without more durable signs of de-escalation and a US-Iran deal,” Gregory Brew, a senior analyst with Eurasia Group said in a note.
“At the same time, risks to shipping remain high, as Iran continues to attack vessels transiting the Strait of Hormuz,” Brew said.
Parallel Diplomatic Developments
Separately, Russian and Ukrainian officials were scheduled to convene on Tuesday for two days of US-brokered negotiations – their first meeting since February – after Trump indicated last week that a broad peace agreement in their 4-1/2-year conflict was possible and could encompass Europe’s security.
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