Crude oil prices slipped below $90 per barrel for the first time since August, extending a sharp recent decline as traders raised their bets on a possible resolution to the Middle East conflict.
Brent crude futures, the global benchmark, fell to $89.70 per barrel in early European trading on Tuesday after dropping almost 6% in the previous session. West Texas Intermediate (WTI), the US benchmark, traded below $85 per barrel, down more than 2%.
The sell-off followed comments from US President Donald Trump that strengthened hopes for an end to Washington’s nearly nine-month conflict with Iran. The oil market has reversed course sharply this month, with prices retreating well below the six-month high reached in late October.
Trump Signals War Could End Soon
Trump said further military strikes against Iran would not be necessary, as pressure grows on his administration to wind down the conflict following the Republicans’ defeat in the US midterm elections.
Speaking on Monday, he said the war with Iran could end “fairly soon” and that Tehran was “talking very politely” with Washington. In a Truth Social post, Trump also said 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.
Both Trump and Vice President JD Vance have acknowledged that public disapproval of the Iran war and high energy prices contributed to the Republicans’ poor showing in last week’s midterm elections.
Analysts See Room for Further Declines
Some analysts expect crude prices to fall further, arguing that Trump may be reluctant to resume military strikes after the Republicans’ election losses. Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management, said the market was betting that Trump would not restart strikes after the vote, according to Bloomberg.
During a 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, an official said.
Uncertainty Persists Despite Softer Tone
It remains unclear whether the softer rhetoric will translate into tangible progress towards ending the war, which was started by the US and Israel. Political uncertainty has also deepened after Israeli Prime Minister Benjamin Netanyahu lost his parliamentary majority last month.
Even so, oil continues to leave the region despite attacks on ships. 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 said on Tuesday that it was sending some tankers through the waterway in coordination with the US military.
The latest move extends a trend seen about a week ago, when 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. At the time, Brent crude dropped 4.5% to $118.30 per barrel, while WTI declined 4.37% to $99.57 per barrel.
That 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, although uncertainty surrounding the Middle East continued to influence oil market movements.
