Oil prices fell again during Asian trading on Tuesday. This is the second consecutive day when the price of crude oil is falling. Traders stepped back as fresh diplomatic efforts worked to defuse the conflict between the United States, Israel and Iran, reducing fears of a large-scale regional war.
By 20:10 ET (00:10 GMT), Brent oil futures expiring in December fell 0.6% to $115.15 a barrel. At the same time, West Texas Intermediate (WTI) crude futures fell 0.5% to $ 105.25 per barrel.
This fall comes after a huge rise last week. That spike sent Brent crude futures to a six-month high, largely on fears that missile attacks would hit Middle East energy hubs and global shipping lanes.
Diplomats took steps to calm tensions
The latest diplomatic talks include the leaders of Iran, Saudi Arabia, Türkiye and Pakistan. Qatari diplomats are also working behind the scenes with Tehran to prevent the fighting from spreading to other countries.
Top officials from Saudi Arabia, Türkiye and Pakistan traveled to Tehran on Monday for talks with Iranian leaders. Their main goal was to cool the heat and establish an open line for real dialogue.
Reports indicate that the closed-door talks included Houthi drone strikes on Saudi targets, the possibility of direct US-Iran discussions, the shipping chaos in the Strait of Hormuz and the naval blockade established by Washington around Iranian ports.
These diplomatic meetings helped assuage the market's immediate concerns about an all-out military clash. Still, oil investors are playing it safe, waiting to see if these talks can actually deliver real, lasting peace.
Supply risk still looms over the market
पूर्व अमेरिकी राष्ट्रपति डोनाल्ड ट्रम्प ने बार-बार कहा है कि ईरान के खिलाफ सैन्य कार्रवाई अभी भी विचाराधीन है। इस बीच, तेहरान का कहना है कि वह व्हाइट हाउस के साथ तब तक बातचीत नहीं करेगा जब तक वाशिंगटन ईरानी कच्चे तेल के निर्यात पर प्रतिबंध नहीं हटाता और अपनी नौसैनिक नाकाबंदी वापस नहीं लेता।
Because of this impasse, the real threats to global crude oil supplies have not yet gone away. The conflict has affected commercial cargo in the Strait of Hormuz and the Bab el-Mandeb Strait, two chokepoints that handle a large share of world fuel transit.
On Monday, Houthi forces claimed they attacked pumping stations along Saudi Arabia's East-West Pipeline and targeted Riyadh airport. Saudi officials have not confirmed the exact attacks, although the kingdom has reported shooting down several drones and missiles over the past few days.
International Energy Agency (IEA) chief Fatih Birol warned on Monday that world fuel markets may not return to pre-war normality even until 2027. He pointed out that prolonged fighting was likely to cause permanent damage to global supply routes.
In response to these supply concerns, Saudi Aramco announced plans to begin storing crude oil in Singapore during the second half of 2027. Energy chiefs from both Saudi Arabia and Singapore arranged this setup to keep their Asian supply chains stable no matter what happens in the Middle East.
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Key tips for crude oil traders
- Diplomatic talks in Tehran have calmed immediate supply jitters, sending Brent below $116 and WTI below $105.
- Key sea routes such as the Strait of Hormuz remain vulnerable, meaning prices could rise sharply if talks break down.
- Long-term supply routes face permanent pressure, prompting major players such as Saudi Aramco to build buffer reserves abroad.