Global oil prices fell sharply on Tuesday as United States President Donald Trump signaled he would hold off on fresh military action against Iran, offering a potential reprieve for oil-importing nations like Pakistan that have been bracing for higher fuel costs amid Middle East tensions.
Brent crude futures dropped 70 cents, or 0.75 percent, to settle at $91.88 per barrel by early Asian trading hours, while US West Texas Intermediate crude declined 78 cents, or 0.90 percent, to $86.07 per barrel. Both benchmarks had already fallen around one percent earlier in the session and recorded significant losses the previous day.
The retreat follows Trump’s remarks on Monday that he plans to avoid new strikes against Iran “at this point” after receiving appeals from regional leaders, including Qatar’s prime minister during White House discussions. Trump confirmed he would maintain a naval blockade in the Strait of Hormuz but emphasized a more restrained approach for now.
Market analysts say the shift in tone has calmed fears of a major supply disruption. “The market continues to prioritize President Trump’s more conciliatory tone toward Iran since the midterms,” said Tim Waterer, chief market analyst at KCM Trade. “While attacks on shipping around the Strait of Hormuz are still occurring, they have not escalated in a way that has forced a fresh risk premium into the market.”
Brent crude has now retreated roughly 22 percent from the six-month high of $118 per barrel it reached on October 30, when fears of US-Iran confrontation were at their peak. The decline offers breathing room for countries like Pakistan, which imports the vast majority of its oil and has seen its energy import bill balloon in recent months.
Despite the recent selloff, analysts warn that prices are unlikely to fall much further without concrete signs of lasting de-escalation. “Prices are unlikely to fall below $90 per barrel for Brent without more durable signs of de-escalation and a US-Iran deal,” said Gregory Brew, a senior analyst with Eurasia Group. “At the same time, risks to shipping remain high, as Iran continues to attack vessels transiting the Strait of Hormuz.”
On the supply side, OPEC oil output rose in October, according to a Reuters survey, with gains led by Saudi Arabia, Kuwait, and Iraq despite ongoing export constraints. Meanwhile, JPMorgan estimated in a recent report that global oil markets are heading toward a glut, with supply exceeding consumption by 1.1 million barrels per day in September and potentially 1.4 million barrels per day in October.
Separately, Russian and Ukrainian officials were set to meet on Tuesday for two days of US-brokered talks—their first direct negotiations since February—after Trump suggested last week that a broad peace deal could be within reach.
For Pakistan, lower oil prices could ease inflationary pressures and reduce the strain on foreign exchange reserves, which have been under pressure from high energy import costs. Any sustained decline in global crude prices would directly benefit Pakistani consumers facing elevated fuel and electricity prices.
