Global crude prices retreated Tuesday after US President Donald Trump ruled out immediate military strikes against Iran, cooling fears of an all-out confrontation that threatened to choke Middle Eastern energy corridors.
Brent crude fell 24 cents, or 0.23%, to $92.33 a barrel by 0102 GMT, extending a steep selloff after tumbling 5.85% in the previous session to its lowest level since August 31. US West Texas Intermediate crude shed 35 cents, or 0.40%, to trade at $86.50 a barrel. The market wiped out the geopolitical risk premium that had inflated prices for weeks.
Trump confirmed Monday that Washington would hold off on fresh strikes against Tehran for now, following direct appeals from regional leaders, including talks with Qatar’s prime minister at the White House. But the de-escalation remains partial. The US will maintain its naval blockade across the Strait of Hormuz—the vital shipping bottleneck through which one-fifth of the world's petroleum flows.
"The market continues to prioritise President Trump's more conciliatory tone toward Iran since the midterms," said Tim Waterer, chief market analyst at KCM Trade. Attacks against commercial vessels near Hormuz have continued, Waterer noted, but the incidents have not escalated enough to inject a renewed risk premium into trading desks.
Tehran swiftly dismissed prospects of an imminent diplomatic thaw. Iranian Supreme National Security Council official Mohsen Rezaei pushed back against reports of direct contact, warning Washington to "stop manufacturing fake news about imaginary talks." Rezaei insisted it was "time to surrender to the seven conditions Iran has repeatedly set out." Senior American and Gulf officials echoed that skepticism, noting a bilateral pact between Washington and Tehran remains distant.
| Benchmark Contract | Latest Price | Change ($) | Percentage Change | Previous Session Move |
|---|---|---|---|---|
| Brent Crude Futures | $92.33 / barrel | -$0.24 | -0.23% | -5.85% (Lowest since Aug 31) |
| West Texas Intermediate (WTI) | $86.50 / barrel | -$0.35 | -0.40% | Extended Losses |
Fundamentals are also weighing on futures. Output across the Organization of the Petroleum Exporting Countries climbed through October, driven by production increases in Saudi Arabia, Kuwait, and Iraq despite persistent maritime export bottlenecks.
Traders are now monitoring high-stakes diplomacy in Europe, where Russian and Ukrainian delegations convene Tuesday for two days of US-brokered talks—their first direct negotiations since February.