Oil Prices Extend Losses as Trump Pauses Iran Strikes, Easing Fears of Middle East Supply Shock

Brent crude has retreated about 23% from its six-month high as oil prices fell for a second session on Tuesday 10 November, after Donald Trump signalled he would hold off further strikes on Iran, easing fears of prolonged supply disruption.

Brent crude was trading at $90.99 (£67.77) a barrel by 0759 GMT, extending a sharp fall on Monday, when it dropped 5.85% to its lowest level since 31 August.

The benchmark has now retreated about 23% from a six-month high of $118 (£87.89), reached on 30 October, as concern has eased that the US president might step up attacks on Iran after the American midterm elections.

Earlier in the session, at 0246 GMT, US West Texas Intermediate (WTI) crude futures stood at $86.07 (£64.10) a barrel, down 0.9%. Both benchmarks had at one point fallen about 1%.

Analysts cautioned that shipping risks remain high and that prices are unlikely to fall much further without firmer signs of de-escalation.

Trump Signals a Pause in Further Strikes

Trump said on Monday he planned to hold off on new military strikes against Iran for the time being, following appeals from several countries in the region.

Reuters reported that Qatar, Saudi Arabia, the United Arab Emirates, Bahrain and Kuwait had urged restraint, and Qatar's prime minister also discussed the conflict with Trump during talks at the White House.

In an interview with Reuters and later in the White House press briefing room, Trump said he would keep a US naval blockade in place for now. He downplayed the need for military action 'at this point', but his remarks signalled restraint rather than a permanent end to operations.

Supply Growth and Shipping Risks Keep Traders Cautious

Tim Waterer, chief market analyst at KCM Trade, said the market continued to prioritise Trump's more conciliatory tone towards Iran since the midterms.

Attacks on shipping around the Strait of Hormuz were still occurring, he said, but had not escalated in a way that forced a fresh risk premium into prices. Shipping disruption remains a concern for traders even as the immediate risk of escalation has receded.

Supply is also weighing on the market. A Reuters survey found that Opec oil output rose in October, led by gains in Saudi Arabia, Kuwait and Iraq, despite continued constraints on exports.

The fall in prices therefore reflects a reassessment of the likelihood of further US military action alongside concern about rising production, rather than Trump's remarks alone.

Gregory Brew, a senior analyst at Eurasia Group, said in a note that he did not expect Brent to fall below $90 (£67.03) a barrel without more durable signs of de-escalation and a US-Iran agreement. He also warned that risks to shipping remained high, citing what he described as continued Iranian attacks on vessels passing through the Strait of Hormuz.

Russia-Ukraine Talks Add a Diplomatic Backdrop

Separately, Russian and Ukrainian officials were due to begin two days of US-brokered talks in Abu Dhabi on Tuesday, their first meeting since February.

Trump suggested last week that a broad peace deal was possible in the four-and-a-half-year war and could take in Europe's security. The talks form part of a wider diplomatic backdrop, although their direct implications for oil markets remain uncertain.