international oil benchmark brent crude oil Prices briefly fell below $90 per barrel on Tuesday, as President Donald Trump’s comments raised hopes for an end to the US government’s nearly nine-month conflict with Iran.
Brent crude, the price benchmark for about 80% of the world’s crude oil, fell 1.17% to settle at $91.49 per barrel. At the low end of the session, the international benchmark fell to $89.16. us WTI crude oil The price fell by 0.93% to settle at $86.04 per barrel.
Brent crude oil.
President Trump said on Monday that the war with Iran could end “quite quickly” and that Iran is in “very polite discussions” with the United States.
“We’re seeing momentum toward ending this conflict, and I think it’s going to end fairly soon,” he said at the White House after a meeting with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani. “Iran is effectively finished militarily,” President Trump told reporters.
Trump also said in a post on Truth Social that Qatar, Saudi Arabia, the UAE, Bahrain and Kuwait “prefer to maintain the status quo” – maintaining a naval blockade against Iran and preventing the country from using land routes to transport advanced weapons and other supplies.
Oil prices have proven highly volatile this year and sensitive to changes in direction in the US and Israel’s war against Iran.
Brent crude oil started the year at around $60 a barrel, but soared to $130 a barrel as military attacks escalated in March and April. Prices fell in June and July, but have returned to those levels as the conflict appears to be becoming increasingly serious.
WTI crude oil.
The flow of crude oil through the crucial Strait of Hormuz waterway has largely been restored. But consumers are struggling with energy market volatility as broader global conflicts, including the Houthi attack on Saudi Arabia and the Russia-Ukraine war, exacerbate a shortage of refining capacity and send prices for diesel, gasoline and jet fuel soaring.
Both President Trump and Vice President J.D. Vance acknowledged that public disapproval of the Iran war and rising energy prices contributed to the Republican Party’s tough showing in last week’s U.S. midterm elections.
Although officials from both countries continue to exchange hostile words, particularly over disputes over sea control in the Strait of Hormuz, the United States has largely curbed its military attacks since September, and President Trump said in early October that it would not resume military strikes until after the midterm elections.
Following reports that two missiles had landed on Qeshm Island, located off Iran’s southern coast near the Strait of Hormuz, the United States launched what President Trump called a “small-scale attack” against Iran.
uncertain negotiations
Analysts were divided over how the U.S. administration would approach the Iran conflict after Democrats won a landslide victory in the midterm elections, with some seeing it as likely to escalate, despite initial market reaction suggesting hope for a deal.
“Markets have continued to unwind some of the geopolitical risk premium built into prices in recent weeks as hopes rise that the U.S.-Iranian conflict may be headed for de-escalation,” ING strategists Ewa Mansey and Warren Patterson said in a note on Tuesday.
“Signs that regional oil flows are recovering are putting downward pressure on the region…Reports that Iran may be softening its position over control of the Strait of Hormuz also set back concerns about prolonged disruption to one of the world’s most important oil shipping routes.”
“For now, an increase in Gulf barrels and the prospect of easing tensions are taking some of the geopolitical premium away from oil. However, as regional negotiations remain uncertain and infrastructure risks persist, we expect oil prices to remain sensitive to developments in the Middle East.”
Fereydoun Fesharaki, chairman of energy consultancy FGE, told CNBC’s “Squawk Box Asia” on Tuesday that despite market movements, there is still no prospect of a peace deal between the United States and Iran.
“The gap between the two sides is too wide to be bridged. Most importantly, the United States wants all nuclear and enriched material to be transferred out of Iran, but there is no way the Iranian regime would agree to this. There is no way the Iranian regime would agree to open the Strait of Hormuz for the free flow of oil as it did before the war,” Fesharaki said.
“So, with these two people in between, I don’t think there’s going to be an agreement.
“President Trump has to make a decision: either say, ‘Declare victory and go away,’ or go to war. If he goes to war, he and (Israeli Prime Minister) Netanyahu only have two weeks from today. Otherwise, in the long run, there will be no war at all,” Fesharaki added.
Prime Minister Benjamin Netanyahu’s party failed to win a majority in Israel’s general election last month, and his rival, former Israel Defense Forces commander Gadi Eisenkot, was formally given the task of forming a government on Sunday.
—CNBC’s Anniek Bao contributed to this article.
Correction: An earlier version of this article incorrectly listed the session low for Brent crude oil.
