Oil Prices Plunge Below $90 As Trump Signals Potential De-escalation With Iran

Crude oil prices plunged below $90 per barrel early Tuesday, falling beneath that threshold for the first time since August, after U.S. President Donald Trump again signaled the possibility of de-escalation in the Middle East and suggested that further strikes against Iran might not be necessary.

By Tuesday afternoon, Brent crude futures had fallen to $89.67 per barrel, while WTI crude, the U.S. benchmark, traded at $84 per barrel.

At the start of the week, oil prices extended last week’s steep sell-off. Brent crude prices tumbled 17% last week, marking their biggest weekly decline since the volatile weeks of 2020 during the COVID-19 pandemic.

Brent crude prices have now fallen by about 25% from their late-October peak of above $117 per barrel, as hopes for an end to the eight-month-old Middle East conflict have strengthened following the U.S. midterm elections, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said early Tuesday.

“President Trump added to the optimism by suggesting that further strikes on Iran would not be necessary. While crude oil flows have almost returned to pre-war levels, LNG and refined product supplies remain constrained, keeping prices elevated, particularly for diesel,” Hansen said.

The market is likely to closely monitor any fresh signals from Washington and Tehran regarding the prospects for a diplomatic breakthrough, the strategist added.