U.S. president Donald Trump doubling down on the notion that further military action against Iran was unlikely caused oil on Tuesday to extend its losses, sliding briefly below $90 per barrel before regaining some momentum.
After Trump met with Qatari prime minister Sheikh Mohammed bin Abdulrahman and said, “At this point, taking the military action doesn’t seem to be a very necessary thing … I think it’s going to be ending fairly soon,” Brent at mid-session traded at $90.32 per barrel.
West Texas Intermediate was trading 2.2 percent lower at $84.77 per barrel.
Trump subsequently told reporters, “We’re seeing momentum toward the end of this conflict,” and he added in a Truth Social post that Qatar, Saudi Arabia, the United Arab Emirates, Bahrain and Kuwait would “prefer the status quo” of maintaining a naval blockade against Iran and preventing the country from using ground routes to transport advanced weapons and other materials.
Trading was also said to have been influenced by Ukraine-Russia peace talks in Abu Dhabi, with any signs of de-escalation between the two countries likely to put further downward pressure on oil prices.
ING strategists Ewa Manthey and Warren Patterson said in a note Tuesday, “The market has continued to unwind some of the geopolitical risk premium built into prices in recent weeks as expectations grow that the conflict between the U.S. and Iran could move towards de-escalation.
“Reports that Iran may be softening its position on control of the Strait of Hormuz have also reduced concerns over a prolonged disruption to one of the world’s most important oil transit routes.”
But Fereidun Fesharaki, chairman of energy consultancy FGE, doubted that a peace deal between the U.S. and Iran would happen; he told media, “The difference between the two sides is so wide, it cannot be bridged...most importantly, the U.S. wants all the nuclear material, enriched material, to be transferred out of Iran, and there is no way that the Iranian regime would agree to this, and there is no way the Iranian regime would agree to let the Strait of Hormuz be open for a free flow of oil the way it was before the war.”
In other war-related news on Tuesday, at least one organization recognized a silver lining in the cloud of the ongoing U.S./Iran conflict: new research by the Global Carbon Project showed that global carbon dioxide emissions from fossil fuels were expected to drop by 0.4 percent in 2026 from a year earlier, due to the oil shock from the Iran war in addition to increased solar and wind power generation.
“Emissions from oil are projected to decrease by 1.9 percent – likely a short-term response to the energy shock triggered by the Iran conflict,” Project scientists stated.
