Oil prices decline as easing US-Iran tensions and rising supply concerns weigh on the market.
Crude oil prices slipped further in early trading on Wednesday (November 11), with Brent briefly falling below the $90-per-barrel mark for the first time since August. The decline came as investors increasingly anticipated a de-escalation in tensions between the United States and Iran.
Oil and energy prices
As of 7:36 a.m. Tokyo time on November 11, benchmark crude prices were trading lower:
- Brent crude: $91.98 per barrel, down 59 cents or 0.64%.
- WTI crude: $86.04 per barrel, down 81 cents or 0.93%.
- Murban (Platts): $92.07, falling $7.10 or 7.16%, based on the November 10 assessment.
- Dubai crude: $93.59, down 3.72%.
- Brent weighted average: $94.15, declining 4.05%.
In other energy markets, natural gas rose 2.42% to $3.296, while gasoline slipped 0.97% to $2.625 and heating oil declined 1.99% to $4.131.
Note: The quoted prices are subject to different reporting delays.
Key factors behind the decline
Trump signals restraint on military action
US President Donald Trump said on Monday that he would refrain from launching additional military strikes following appeals from regional countries. However, Washington intends to maintain its naval blockade in the Strait of Hormuz. The remarks have encouraged traders to anticipate a possible easing of regional tensions.
Brent extends its losses
Brent crude settled at $92.57 on Monday, marking a decline of $5.75, or 5.85%. The downward momentum continued in subsequent trading, with prices briefly touching $89.65 on Tuesday, their lowest level since August 31. This represents a fall of approximately 23% from the October 30 peak of nearly $118 per barrel.
Improving supply prospects increase market pressure
Middle Eastern oil producers have reportedly been reducing prices to attract buyers as shipping activity through the Strait of Hormuz gradually recovers. The improvement in supply flows has raised concerns about a potential surplus in the global oil market.
Meanwhile, liquefied natural gas (LNG) shipments through the strategic waterway have reached their highest level since the conflict began. Diplomatic developments, including Russia-Ukraine peace discussions in Abu Dhabi, are also influencing market sentiment.
Market outlook and risks
The recent decline in oil prices largely reflects expectations of diplomatic progress rather than a confirmed peace agreement. Although hopes of reduced hostilities have eased concerns about supply disruptions, geopolitical risks remain significant.
Brent crude traded near $91 per barrel at one point on Tuesday, while WTI approached $85. Both benchmarks have recorded substantial losses this month.
However, the market continues to face uncertainty following a fresh attack on a Saudi pipeline near Medina and incidents involving oil tankers.
The reported percentage changes appear to be measured against Monday’s settlement price of $92.57 for Brent.
What investors should watch
Market participants will closely monitor Qatar-mediated diplomatic negotiations, oil and LNG shipments through the Strait of Hormuz, OPEC production decisions and upcoming US inflation data.
A breakthrough in diplomatic negotiations could put further downward pressure on crude prices by improving supply expectations. Conversely, a breakdown in talks or renewed military escalation could quickly reverse the recent losses and trigger another surge in oil prices.
