Oil extends slide as U.S.-Iran talks raise hopes of lasting de‑escalation

In Asian trading on Tuesday, oil prices continued their sharp retreat after a more than 9% plunge the previous session. As of 20:44 ET (00:44 GMT), Brent Oil Futures were down 0.6% at $87.85 a barrel, while Crude Oil WTI Futures fell 0.8% to $81.96 a barrel.

The renewed decline followed President Donald Trump’s announcement that Washington and Tehran were engaged in talks aimed at ending the conflict, after the United States suspended further strikes. Trump’s statement, coupled with Iran’s decision to halt retaliatory attacks, lifted market sentiment and reduced expectations of a broader disruption to Middle‑East crude supplies. Reports also indicated that China was working to revive diplomatic efforts between the two sides.

IG senior market analyst Tony Sycamore explained that the more than 9% sell‑off reflected growing confidence that an off‑ramp to the conflict had emerged, easing immediate fears over attacks on energy infrastructure. However, he cautioned that the pause remained fragile and that markets were still waiting for concrete evidence of lasting diplomatic progress before fully pricing out geopolitical risks.

Despite the improved sentiment, Sycamore noted that tanker traffic through the Strait of Hormuz has shown little meaningful recovery, and flows through the Bab el‑Mandeb Strait remain well below normal levels. Negotiators from Iran and Oman continue discussions aimed at restoring shipping through the Strait of Hormuz, which normally carries about one‑fifth of global oil flows. Any breakdown in talks or renewed attacks on Saudi export infrastructure could quickly rebuild the geopolitical risk premium in crude prices.

On the supply side, Kazakhstan’s main oil export terminal resumed loadings after disruptions caused by Ukrainian drone attacks. Two tankers began loading at the Caspian Pipeline Consortium terminal near the Russian port of Novorossiysk, according to Kazakhstan’s energy ministry, adding to expectations that global crude supplies could improve.