Crude Oil Pulls Back

Crude oil fell to $98 a barrel on Tuesday amid hopes of diplomatic progress between the US and Iran. Pakistan’s army chief, Field Marshal Asim Munir, met with senior Iranian diplomatic and military officials in Tehran to discuss bilateral relations and the status of talks with the US. Although officials from both sides have said in recent weeks that messages and proposals are being exchanged through mediators, the extent of their differences on key issues remains unclear. US President Trump said earlier this month that US forces would not attack Iran before the midterm elections. Meanwhile, attacks on tankers and strikes targeting Saudi Arabia have escalated. At least 18 vessels have come under fire over the past two weeks. On Tuesday, Iran’s IRGC said two “non-compliant” oil tankers had been struck in the Strait of Hormuz. Foreign Ministry spokesperson Esmaeil Baqaei warned at a weekly news conference that Iran would respond to US attacks “in equal measure, if not more forcefully.”

Crude oil fell 1% to below $97 a barrel on Tuesday after an unconfirmed report suggested that Qatar and Pakistan presented a new proposal to revive negotiations aimed at ending the Iran war. The news pushed prices down from four-week highs, as fighting intensified across the Middle East and Iran increased attacks on tankers in the Strait of Hormuz. Shipping risks remain a key concern, with maritime tracker Kpler reporting that at least 18 vessels had come under fire over the previous two weeks. Iran’s Revolutionary Guard Corps said on Tuesday that two oil tankers had caught fire after striking mines laid by its naval unit, according to the Tasnim news agency. Separately, Iranian Foreign Ministry spokesperson Esmaeil Baqaei warned that Tehran would respond forcefully to any US attack. US President Donald Trump said earlier this month that American forces would not strike Iran before the November 3 midterm elections.

Crude oil climbed above $100 a barrel on Tuesday, reaching its highest level in more than four weeks as renewed Houthi attacks and reports of vessel strikes in the Gulf heightened concerns over Middle East supply security. Yemen’s Iran-aligned Houthi movement claimed responsibility for attacks targeting Saudi energy, airport and military facilities, including an Aramco site in Yanbu and the Shaybah oilfield. Market concerns have intensified after shipping tracker Kpler reported that at least 18 vessels had been attacked over the previous two weeks, reinforcing the geopolitical risk premium embedded in oil prices. The latest escalation also follows a deadly Houthi attack on a security forces training camp in Yemen. Analysts warned that prices could remain elevated while regional supply routes face threats, although the risk premium may gradually diminish if shipments continue uninterrupted. Meanwhile, US crude and refined-product inventories were expected to have declined last week.