Oil Falls to 7-Week Low

Crude oil fell around 3% to below $86 per barrel on Tuesday, the lowest since April 17, after Israel and Iran agreed to halt attacks following a renewed escalation in hostilities. Israeli Prime Minister Benjamin Netanyahu said Israel would pause strikes but warned it would respond to any further attacks from Tehran, while Iranian media reported a similar position. President Donald Trump said this week that negotiations were entering the final stage and that a clearer outcome could emerge within days. Meanwhile, China’s crude imports dropped to around 7.8 million barrels per day last month, the lowest level in more than eight years and nearly 4 million barrels per day below the 2025 average. Weaker demand from the world’s largest oil importer, combined with record US exports and emergency reserve releases, has helped limit the price impact of the conflict. Oil remains above prewar levels but well below recent highs.

Crude oil fell below $90 per barrel on Tuesday after surrendering most of the previous session’s gains, as Iran and Israel agreed to halt attacks against each other, boosting hopes that peace negotiations could move forward. The two countries exchanged strikes over the weekend, threatening a fragile ceasefire and fueling fears of a broader escalation. President Donald Trump urged both sides to deescalate and said talks with Tehran are continuing, adding that oil prices should ease once the conflict ends. While the ceasefire remains intact, the Strait of Hormuz is still effectively closed under a dual blockade by the US and Iran, severely disrupting shipments of crude, refined fuels, and natural gas to global markets.

WTI crude oil futures eased to $91 per barrel after having reached $95 earlier on Monday after Iran stated it had ended its military operations against Israel. US President Trump added that both countries were close to a new ceasefire and that there was progress between Washington and Tehran, easing concerns that the escalation would hamper negotiations that gradually restore exports of oil through the Persian Gulf. Israel also signaled that it will hold fire for the moment, after an exchange of strikes with Iran over the weekend breached their ceasefire, driving oil futures higher in Asian trading. Separately, OPEC+ approved another increase in July oil production quotas of 188,000 barrels per day despite persistent supply risks stemming from tensions in the Middle East. Fresh data indicating an aggressive pullback in imports by China also limited supply pressures, as Asia's top consumer has relied on inventory instead of overseas supply since the start of the conflict.