Brent crude briefly fell below $90 a barrel for the first time since August 31, after a 5.9% decline in the previous session. By 1214 GMT, Brent futures were down 2.34% at $90.40 a barrel, while US West Texas Intermediate crude had fallen 2% to $85.10, Reuters reported.
Trump said on Monday that he planned to delay additional strikes against Iran following appeals from regional leaders, including Qatar’s prime minister. The shift in tone reduced some of the geopolitical risk premium that had lifted prices amid fears of a prolonged disruption to energy flows.
Shipping risks have not disappeared. Attacks around the Strait of Hormuz, a critical route for global oil and gas exports, continued, although market participants said they had not escalated sufficiently to prompt a fresh increase in risk pricing. Any sustained interruption to traffic through the waterway could affect supply expectations and raise transport and insurance costs.
The decline has also reflected signs that the global oil market may be moving towards a surplus. JPMorgan estimated that excess supply reached about 1.4 million barrels per day in October as high prices weighed on demand. A Reuters survey also found that OPEC output increased during the month, led by higher production in Saudi Arabia, Kuwait and Iraq, despite continuing export constraints.
Brent has fallen about 23% from a six-month high of $118 reached on October 30, as expectations of further US military action have eased. The retreat could reduce pressure on fuel costs and inflation if lower prices persist, although the effect on consumers will depend on exchange rates, refining margins and local taxes.
For energy markets, the immediate balance remains between diplomatic developments, the security of shipping routes and evidence of rising supply. A renewed escalation involving Iran or disruption around Hormuz could quickly reverse the decline, while a sustained easing of tensions and a larger supply surplus would leave prices vulnerable to further losses.
