Global oil prices fell below $100 per barrel after US President Donald Trump indicated that Washington had no immediate plans for further military strikes against Iran, easing fears of an escalation in the Middle East conflict.
Brent crude futures declined 3.5 per cent to $94.93 per barrel, while US benchmark West Texas Intermediate (WTI) dropped three per cent to $88.13.
The decline reflects growing market optimism that diplomatic efforts could eventually ease tensions between Washington and Tehran, although uncertainty remains over the prospects of a lasting agreement.
According to CNBC, Trump had previously suggested that the United States could resume attacks on Iran after last week’s midterm elections. However, there was no indication of an immediate large-scale American military campaign.
Iran has warned that it would retaliate against US and Israeli targets if further attacks were launched.
Iranian Foreign Minister Abbas Araghchi said negotiations with Washington had made no significant progress, adding that Tehran was waiting to see whether the US administration would change its position after the elections, according to The Wall Street Journal.
Saxo Bank analyst Ole Hansen said the decline in oil prices reflected growing optimism about a possible US-Iran peace agreement rather than concrete evidence of progress in negotiations.
Brent crude had already fallen 16 per cent the previous week, recording its steepest weekly decline since the outbreak of the COVID-19 pandemic.
The latest movement suggests that traders are increasingly pricing in the possibility of reduced geopolitical tensions and fewer disruptions to global oil supplies.
However, continued military and maritime incidents in the region indicate that the risks to energy markets have not disappeared.
Despite Trump’s indication that there were no immediate plans for further strikes, security incidents continued across the Middle East over the weekend.
An administrative office operated by Saudi Aramco in Riyadh sustained minor damage on Sunday after debris fell following an attempted attack, according to The Wall Street Journal.
Saudi Arabia’s Energy Ministry said there were no casualties. The Iran-aligned Houthi movement claimed responsibility for the attack, according to CNBC.
There were also security incidents involving commercial shipping near the strategically important Strait of Hormuz.
The United Kingdom Maritime Trade Operations (UKMTO) said an unidentified projectile struck a tanker departing the Strait of Hormuz on Sunday. The vessel’s crew was reported safe.
The maritime agency also relayed a report from military authorities about a tanker on fire approximately eight nautical miles northwest of Khasab, Oman. Its crew was evacuated, although the cause of the fire was not immediately disclosed.
The incidents have reinforced concerns about the security of shipping routes through the Gulf, particularly the Strait of Hormuz, a critical passage for global oil supplies.
