Oil Prices Plunge as Trump Rules Out Further Strikes on Iran

Global oil prices continued to decline on Tuesday, extending Monday's sharp losses as concerns over further escalation between the United States and Iran eased. The downturn followed remarks by US President Donald Trump indicating that he sees no need for additional military strikes against Tehran.

As of 9:30 a.m. GMT, Brent crude futures had fallen $2.39, or 2.58%, to $90.18 per barrel, while US West Texas Intermediate (WTI) crude dropped $2.11, or 2.43%, to $84.74 per barrel. Brent briefly slipped below $90 for the first time since August 31, after recording a 5.85% decline on Monday.

The latest losses followed Trump's announcement overnight that he had decided to refrain from launching further military strikes against Iran for the time being, following appeals from regional leaders, including Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani. Trump described a renewed military campaign against Iran as "very unlikely," adding that there appeared to be no need for further action.

Tim Waterer, chief market analyst at KCM Trade, explained that investors are placing increasing weight on Trump's more measured rhetoric since the midterm elections. Although attacks on vessels near the Strait of Hormuz have continued, he noted that the incidents have not escalated sufficiently to trigger another increase in the geopolitical risk premium reflected in oil prices.

Meanwhile, analysts are identifying signs of a renewed global oil surplus, partly driven by weakening demand amid elevated prices. JPMorgan estimated that the worldwide surplus reached approximately 1.4 million barrels per day in October. A Reuters survey also found that OPEC production increased during the month, primarily in Saudi Arabia, Kuwait, and Iraq, despite ongoing export restrictions.