Oil Holds Decline on Hopes of US-Iran Breakthrough

Crude oil fell below $96 a barrel on Tuesday, reaching a three-week low and extending the previous session’s 7.4% decline. Prices reversed earlier gains as President Donald Trump announced that Washington would end its financial support for Israel by year-end, following an agreement with Prime Minister Benjamin Netanyahu to discontinue the $4 billion aid programme. Trump said Israel no longer needed the assistance, although the US would remain willing to provide other forms of support. Also, US Energy Secretary Chris Wright said overnight attacks on Iran’s Qeshm Island had not affected oil flows, while indicating that additional refined products would be supplied from the Persian Gulf and India. Meanwhile, Iran signaled greater flexibility towards diplomacy, with President Masoud Pezeshkian saying Supreme Leader Mojtaba Khamenei had authorized discussions on issues previously considered non-negotiable.

Crude oil climbed above $98 per barrel on Tuesday, recovering some of the previous session's losses following reports of a US attack on Iran's Qeshm Island. The reported strike appears to mark the latest in a series of limited military operations allegedly carried out by Washington while diplomatic negotiations remain ongoing. This follows a sharp decline of more than 6% in the US oil benchmark on Monday, after signs of progress in US-Iran talks eased concerns over further supply disruptions. Iran's Foreign Ministry spokesperson Esmail Baghaei stated that "the ball is in the US court" regarding a potential agreement to end the conflict, while US President Donald Trump claimed in a social media post that Tehran was eager to reach a settlement as soon as possible. These developments come as the US midterm elections get underway, with the Trump administration and Republican Party facing increasing political pressure over rising energy costs associated with the Iran conflict.

Crude oil rose above $97 per barrel on Tuesday but held most of the more than 6% decline in the previous session, as signs of diplomatic progress between the US and Iran eased fears of further supply disruptions. Iranian President Masoud Pezeshkian said his government had received greater authority from the country’s supreme leader to pursue peace negotiations, while US President Donald Trump indicated that progress had been made in the talks. Iranian officials also suggested that a deal remained within reach following three days of Qatar-mediated discussions. These developments come as the US midterm elections get underway, with the Trump administration and Republican Party facing growing political pressure over rising energy costs linked to the Iran conflict. The US oil benchmark had previously climbed to multi-week highs amid concerns that Washington could resume military strikes against Iran following the midterm elections.