Oil Prices Continue to Fall

Crude oil fell to around $79 per barrel on Tuesday, touching its lowest level in more than a week, as renewed diplomatic efforts over the Strait of Hormuz improved the outlook for Middle East oil supplies. Iran’s Foreign Minister Abbas Araghchi held separate talks with his Saudi and Omani counterparts, focusing on restoring security in the strategic waterway after disruptions caused by the US-Iran conflict. Oman has proposed a joint regional mechanism to manage the strait, allowing Iran to collect voluntary transit fees, a plan that has reportedly gained support from Gulf states. Also, President Donald Trump said Washington was holding “good talks” with Tehran, although he warned military strikes could resume if diplomacy fails, while Iran also threatened retaliation. Despite the diplomatic progress, regional risks remain elevated after Saudi Arabia intercepted drones targeting oil facilities and Yemen’s Houthi rebels claimed an attack on the kingdom’s East-West pipeline.

Crude oil fell to around $81 per barrel on Tuesday, touching its lowest level in more than a week, as optimism over a potential diplomatic breakthrough between the US and Iran eased concerns about supply disruptions. President Donald Trump said Washington was engaged in “good talks” with Tehran and that there was a “good chance” of reaching a resolution after pausing military strikes to give negotiations more time. He cautioned, however, that US attacks would resume if diplomacy failed, while Iran also warned it would retaliate should talks collapse. Oman has reportedly proposed a joint regional mechanism to manage shipping through the Strait of Hormuz, including a voluntary fee system. Despite the improving diplomatic outlook, geopolitical risks remain elevated. Saudi Arabia said it intercepted drones launched from Iraq targeting petroleum facilities, blaming Iran-backed groups, while Yemen’s Houthi rebels claimed responsibility for an attack on Saudi Arabia’s East-West oil pipeline.

Crude oil fell to around $81 per barrel on Tuesday, marking a third consecutive session of losses after President Donald Trump said the US was engaged in "good talks" with Iran aimed at ending the Middle East conflict, fueling optimism that normal oil flows from the region could resume. Trump reportedly said he chose to suspend strikes on Iran to give negotiations another chance. The US quietly halted attacks on the Islamic Republic late Friday following nearly two weeks of fighting, while Tehran also ceased retaliatory strikes against US bases in neighboring countries. Meanwhile, Iranian and Omani negotiators met over the weekend in an effort to secure an agreement to restore shipping through the strategically important Strait of Hormuz. Elsewhere, supply conditions also improved as crude exports resumed at the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, a major outlet for Kazakh oil that had recently been disrupted by Ukrainian drone attacks.