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Crude oil prices fell below $90 per barrel for the first time since August, extending their recent decline as traders increased bets on a possible resolution to the Middle East conflict.
The global benchmark, Brent crude futures, dropped to $89.70 per barrel early Tuesday morning in Europe after falling almost 6% the previous day, while the US benchmark, West Texas Intermediate (WTI), traded below $85 per barrel.
The decline followed comments from US President Donald Trump that fuelled hopes for an end to Washington’s nearly nine-month conflict with Iran.
The oil market has sharply reversed this month, with prices retreating significantly from the six-month high reached in late October.
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Brent crude falls below $90
Brent crude futures fell to $89.70 per barrel early Tuesday, extending losses recorded in the previous trading session. WTI crude also declined by more than 2%, trading below $85 per barrel.
The latest price movement reflects growing market expectations that diplomatic efforts could help bring the conflict to an end and reduce the risk of further disruptions to global oil supplies.
Trump said further military strikes against Iran would not be necessary, as pressure mounts on his administration to end the conflict following Republicans’ defeat in the US midterm elections.
He said on Monday that the war with Iran could end “fairly soon” and that Tehran was “talking very politely” with Washington.
- Speaking at the White House after meeting Qatar’s Prime Minister, Sheikh Mohammed bin Abdulrahman Al Thani, Trump said: “We’re seeing momentum toward the end of this conflict. I think it’s going to be ending fairly soon.”</em
Trump also said in a Truth Social post that Qatar, Saudi Arabia, the UAE, Bahrain and Kuwait would prefer the status quo, including maintaining a naval blockade against Iran and preventing the country from using ground routes to transport advanced weapons and other materials.
Trump and Vice President JD Vance have both acknowledged that public disapproval of the Iran war and high energy prices played a role in the Republicans’ poor performance in the US midterm elections last week.
Trump signals possible Iran war end
Some analysts expect crude oil prices could fall further, arguing that Trump may be reluctant to resume military strikes following the Republicans’ losses in the midterm elections.
According to Bloomberg, Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management, said the market was betting that Trump would not resume strikes after the election.
- “The market is betting Trump won’t resume strikes after the midterm blue wave. Crude could fall further, but I think the biggest move is behind us,” he said.
- With the conflict now in its ninth month and pressure mounting on the Trump administration to find a way to end it, congressional Democrats are considering using the December 11 government shutdown deadline as leverage to push the president towards ending the war.
- The market appears focused on hopes that the latest diplomatic push in the Middle East, mediated by Qatar, could result in an agreement.
However, it remains unclear whether the softer rhetoric will translate into tangible progress towards ending the war started by the US and Israel. Political uncertainty has also deepened after Israeli Prime Minister Benjamin Netanyahu lost his parliamentary majority last month.
- An official familiar with the matter said negotiations would continue and that there would likely be no military escalation while the talks were ongoing.
During the meeting with Qatar’s prime minister, the US signalled that maintaining the diplomatic status quo and applying economic pressure on Iran offered the best route to resolving the conflict, the official said.
- Tehran has insisted that Washington end its naval blockade of the country’s ports and lift sanctions, while the US has pressed Iran to stop attacking vessels in the Strait of Hormuz and make concessions over its nuclear programme.
Despite attacks on ships, oil continues to leave the region. A wave of Strait of Hormuz crossings over the past couple of months has brought overall oil shipments from the Middle East close to pre-war levels. Saudi shipping firm Bahri also said on Tuesday that it was sending some tankers through the waterway in coordination with the US military.
What you should know
About a week ago, oil prices fell by more than 4% as hopes of a diplomatic agreement to end the US-Israeli war on Iran eased concerns about further disruptions to global crude supplies.
Checks by Nairametrics showed that Brent crude dropped by 4.5% to $118.30 per barrel at the time of reporting, while US West Texas Intermediate crude declined by 4.37% to $99.57 per barrel.
The decline followed a third consecutive day of talks involving Iranian and Qatari officials aimed at advancing negotiations to end the conflict, which had heightened concerns about global oil supplies and shipping through the Middle East.
The earlier price movement also reflected expectations that diplomatic efforts could prevent another escalation of the conflict, although uncertainty surrounding the Middle East continued to influence oil market movements.
