Oil prices dropped below $90 a barrel on Tuesday, marking the first time since August that they have fallen to this level. The decline came after US President Donald Trump signaled a more cautious approach toward Iran, easing concerns about potential supply disruptions in the Middle East. Trump indicated that he would hold off on new military strikes against Iran for the time being, following appeals from regional leaders, including Qatar’s prime minister.
Trump’s remarks in a Reuters interview and a White House press briefing suggested that while a naval blockade in the Strait of Hormuz would remain in place, there was no immediate plan for further escalation. Analysts noted that the market responded positively to Trump’s conciliatory tone, despite ongoing attacks on shipping in the region. Tim Waterer, chief market analyst at KCM Trade, observed that these attacks had not yet triggered a significant risk premium in oil prices.
On the supply side, OPEC’s oil output increased in October, driven by gains in Saudi Arabia, Kuwait, and Iraq, according to a Reuters survey. However, concerns about potential shipping disruptions persisted, even as Brent crude prices retreated more than 22 percent from their six-month high of $118 on October 30. The easing of tensions between the US and Iran had contributed to this price decline, though uncertainties remained.
Meanwhile, Russian and Ukrainian officials were set to meet for two days of US-brokered talks on Tuesday, their first since February. The discussions followed Trump’s suggestion that a broad peace deal in their four-and-a-half-year war could be possible, potentially incorporating Europe’s security.