The price of Brent oil (Brent Crude) fell to $89.70 per barrel early on Tuesday, reaching below $90 for the first time since August. This downward trend occurred due to signs of reduced tensions in the Middle East and statements from U.S. President Donald Trump indicating there is no need to attack Iran.
Decline in U.S. Crude Oil Prices
At the same time, West Texas Intermediate (WTI) crude oil, which is the U.S. oil benchmark, dropped more than 2% to below $85 per barrel. At the start of Asian trading, Brent oil prices fell below $92 per barrel after Trump announced that there are currently no plans to attack Iran.
Read more: Brent Drops 7% Under the Influence of Peace Hopes in Iran
Houthi Attacks on Saudi Oil Infrastructure
While prices were declining, the Houthis continued to target Saudi Arabia's energy infrastructure. The latest attack once again targeted the East-West pipeline, which, according to a Saudi Ministry of Energy official, resulted in a limited fire that was quickly extinguished.
In Tuesday morning trading in Europe, the market is focused on hopes for new diplomatic advancements in the Middle East mediated by Qatar. At the beginning of this week, oil prices continued a sharp downward trend from last week. Brent oil prices fell 17% last week, marking the largest weekly decline since the outbreak of the coronavirus in 2020.
The price of Brent oil has now decreased by about 25% from its October peak of over $117 per barrel. Hopes for an end to the eight-month conflicts in the Middle East have been bolstered following the U.S. midterm elections. Ole Hansen, head of commodity strategy at Saxo Bank, stated: "Trump has added to this optimism by suggesting there is no need for further attacks on Iran."
While crude oil flows have nearly returned to pre-war levels, the supply of liquefied natural gas (LNG) and refined products remains limited, keeping prices particularly high for diesel. Today, the market is likely to closely monitor any new signs from Washington and Tehran regarding the prospect of a diplomatic success.
Read more: Gasoline Consumption Management in Iran Reaches Negative Growth of 2% · Jam Petrochemical Announced Finalization of Negotiations for Replacement of Liquid Feed Furnace Burners in Shanghai
