$1 Per Barrel: US-Iran Conflict Hopes Weigh on Oil Prices

Oil prices continued their decline on Tuesday, down by over $1 per barrel amid hopes for a resolution in the US-Iran conflict. The Brent crude futures contract was down $1.47, or 1.66%, at $86.89, its lowest since July 20. U.S. West Texas Intermediate crude was at $81.16 a barrel, down $1.45, or 1.76%, also reaching its lowest level since July 20.

Analysts say the relief that an off-ramp has been found in the conflict has taken the heat out of prices and eased concerns around Houthi attacks on Saudi infrastructure. However, Tony Sycamore, an IG analyst, warned that 'the situation remains highly fluid.' Afrah al-Zouba, Yemen's foreign minister-designate, said Houthi fighters aimed to replicate Iran's control of shipping through the Strait of Hormuz at Bab el-Mandeb.

The disruption in oil flows has been significant, with Barclays analysts noting that crude oil and refined product net exports through the strait averaged 2.9 million barrels a day compared to 5.9 million in the previous week. The US also saw a drop in crude oil stockpiles last week, alongside gasoline, while distillate stocks likely rose.