Following the elections in Israel and the US, oil prices keep falling
On Tuesday, oil prices declined—extending losses from the previous day—after U.S. President Donald Trump stated that there is no need for military intervention against Iran "at this stage." This remark downplayed the likelihood of an escalation in tensions with Iran, thereby easing concerns regarding potential long-term supply disruptions in the Middle East.
As of 02:46 GMT, Brent crude futures fell by 70 cents (0.75%) to $91.88 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped by 78 cents (0.90%) to $86.07 per barrel.
Both benchmarks had fallen by 1% earlier in the day.
In the previous session, Brent crude had closed 5.85% lower, reaching its lowest level since August 31.
On Monday, President Trump indicated that he plans to hold off on any new military strikes against Iran for the time being, though he noted that the current naval blockade in the Strait of Hormuz would remain in place.
The market continues to focus on the conciliatory tone President Trump has adopted toward Iran since the midterm elections. Although attacks on maritime shipping around the Strait of Hormuz have persisted, they have not escalated to a degree that would warrant the addition of a new risk premium to the market.
On the supply side, OPEC oil production rose in October—led by increases in Saudi Arabia, Kuwait, and Iraq—even as restrictions on exports remained in place.
Brent crude has retreated by approximately 22% from the six-month high of $118 reached on October 30, following an easing of concerns that Trump might intensify actions against Iran after the U.S. midterm elections.
Despite the recent sell-off, it appears unlikely that the price of a barrel of Brent crude will fall below $90, absent more definitive signs that tensions are subsiding or the reaching of an agreement between the U.S. and Iran.
Meanwhile, risks to maritime shipping remain high as Iran continues its attacks on vessels passing through the Strait of Hormuz.
Separately, following Trump’s suggestion last week that a comprehensive peace agreement—potentially encompassing European security—might be achievable in the four-and-a-half-year-old Russia-Ukraine conflict, Russian and Ukrainian officials are scheduled to meet on Tuesday for two days of U.S.-mediated talks. This meeting will mark the first contact between the two sides since February.
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