Oil prices fall below $90 as hopes rise for end to US-Iran war
Global oil prices fell below $90 a barrel on Tuesday for the first time since August, as growing hopes of a diplomatic resolution to the eight-month US-Iran war eased concerns over disruptions to global energy supplies.
Brent crude, the international benchmark, dropped 3.1% to $89.66 a barrel, while US West Texas Intermediate declined 2.3% to $84.86, extending losses recorded in recent trading sessions.
US President Donald Trump said on Monday that there was “positive momentum” towards ending the conflict, describing Iran as militarily weakened while suggesting that further American strikes were increasingly unlikely.
“We are seeing positive momentum toward an end to this conflict, and will ensure that America’s interests are at all times protected,” Trump said after meeting Qatar’s prime minister at the White House.
However, Iran insisted that any agreement must address its demands, including the lifting of oil sanctions, the release of frozen Iranian assets and an end to the US counter-blockade of Iranian ports.
Iranian Foreign Minister Abbas Araghchi told the state-run IRNA news agency that military pressure and economic sanctions would not resolve the conflict.
“The conflict with Iran will not be resolved through military means, nor by intensifying sanctions,” Araghchi said.
He maintained that diplomacy remained the only viable solution, urging Washington to respect Tehran’s conditions for reopening the strategically important Strait of Hormuz.
Iran has proposed reopening the waterway within two days if the United States accepts its conditions, including an end to hostilities on all fronts.
The strait, a vital passage for global oil shipments, has been blockaded by Tehran since the conflict began in late February following US-Israeli strikes that killed Iran’s supreme leader, Ayatollah Ali Khamenei.
Diplomatic efforts led by Qatar and Pakistan are continuing, although significant differences remain between Washington and Tehran.
Iran’s security chief, Mohsen Rezaei, adopted a tougher position on Tuesday, urging the United States to accept Tehran’s demands.
“The war on Iran has already wrecked the US government,” Rezaei wrote on X, accusing Washington of spreading misleading claims about negotiations.
The latest decline in oil prices reflects market expectations that a diplomatic breakthrough could restore shipments through the Strait of Hormuz and reduce pressure on international energy markets.