Crude oil prices dropped below $90 per barrel on Tuesday for the first time since August, following comments from US President Donald Trump suggesting that further military action against Iran may not be imminent.
During early European trading, the international benchmark fell to $89.70 per barrel, while West Texas Intermediate (WTI), the US benchmark, also saw a decline of over two per cent, dipping below $85 per barrel.
The decline was spurred by Trump’s indication that he is not currently considering an attack on Iran, raising hopes for diplomatic progress in the Middle East.
In Asian trading, Brent crude had already dropped below $92 per barrel as investors reacted to signs of a potential de-escalation in the ongoing conflict that has lasted eight months. Market confidence has been bolstered by reported diplomatic efforts from Qatar, which could facilitate a resolution between the involved parties.
However, worries about potential disruptions to energy supplies persist, particularly as Yemen’s Houthi group continues to target Saudi Arabia’s energy infrastructure. The latest attack on the East-West pipeline resulted in a minor fire that was quickly extinguished, according to a Saudi energy ministry official.
Oil prices have continued their downward trend after a significant 17 per cent drop last week, marking the steepest weekly decline since early in the COVID-19 pandemic in 2020. Brent crude has now decreased by around 25 per cent from its peak of over $117 per barrel in late October.
