The price of oil fell further on Tuesday after US President Donald Trump said more strikes on Iran would not be needed. The fall came after oil closed at its lowest level since August.
Brent crude, the global benchmark, dropped below $92 a barrel after sliding almost 6% on Monday, Moneyweb reported. West Texas Intermediate, the main US oil price, was trading near $86 a barrel.
“Iran, militarily, is effectively over,” Trump told reporters on Monday. He spoke after meeting Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani at the White House.
Qatar is helping with talks between the US and Iran. Trump said the US remains “locked and loaded”. He also signalled that he wants to wind down the war, which is now in its ninth month.
Hopes for an earlier end to the war have grown since the US midterm elections. The results showed the conflict is unpopular. Democrats in Congress are weighing whether to use a 11 December government shutdown deadline to push Trump to end it.
“The midterm results have significantly narrowed Trump’s options for a large-scale, long-term military operation against Iran and that’s reflected in his rhetoric,” said Takahiro Asaoka, senior economist at Itochu Research Institute.
Asaoka said this was taking some of the war risk out of the oil price. He added that Brent would likely stay above $85 a barrel if there is no deal with Tehran.
Brent has fallen sharply from a six-month high at the end of October. Last week it had its biggest weekly fall since April 2020, when not adjusted for contract expiry.
It is not yet clear if the softer words will lead to real progress. The war was started by the US and Israel. Israeli Prime Minister Benjamin Netanyahu lost his majority in parliament at the end of October.
Months of on and off talks have not produced a deal. Iran wants the US to end its naval blockade of Iranian ports and lift sanctions. Washington wants Iran to stop attacking ships in the Strait of Hormuz and give ground on its nuclear programme.
US Secretary of State Marco Rubio played down the chances of a breakthrough. Risks to energy sites also remain. Saudi Arabia’s East-West pipeline was targeted on Monday in the Medina region, the state-run Saudi Press Agency reported. It said the attack caused a limited fire that was put out.
Ukraine kept striking Russian oil refineries, while Moscow repeatedly hit energy and civilian sites in Ukraine. US-mediated talks between the two countries were due to start on Tuesday in Abu Dhabi, with more senior diplomats taking part than in earlier rounds.
Oil traders will also watch monthly reports from three major forecasters. The US Energy Information Administration reports on Tuesday, OPEC on Wednesday and the International Energy Agency on Friday.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.