Oil prices eased on Tuesday as Iran and Israel paused attacks, according to Business Today. WTI crude fell 52 cents to $90.78 per barrel, down 0.57%, while Brent crude dropped 48 cents to $93.77 per barrel, down 0.51%. The retreat followed a volatile session after both countries said they had stopped attacking each other following an appeal from US President Donald Trump. However, Tehran warned that it would resume strikes if Israel continued targeting Hezbollah in Lebanon.
Price Action and Recent Context
Prior to the pause, crude had surged more than 5% on Monday after fresh Israeli strikes on Iran and attacks in Lebanon raised doubts about a quick end to the conflict. Israel said it had targeted a petrochemical plant in southwestern Iran used to produce ballistic missiles. In response, Iran's Islamic Revolutionary Guard Corps (IRGC) said it had struck a similar Israeli facility in Haifa. The latest attacks followed Israeli strikes over the weekend on Hezbollah strongholds in Beirut.
Since the conflict began more than 100 days ago on February 28, Brent has gained approximately 31% and WTI has risen about 37%. Earlier in April, Brent had climbed above $126 a barrel.
Supply-Side Disruptions and OPEC+ Response
Investors remain worried about possible disruptions to the Strait of Hormuz, a crucial route for global energy shipments. UBS analyst Giovanni Staunovo noted that markets are concerned restrictions in the waterway could continue longer. Before the latest escalation at the end of February, about one-fifth of the world's daily oil and liquefied natural gas supplies passed through the Strait of Hormuz.
Esmail Qaani, commander of Iran's Revolutionary Guards' Quds Force, was quoted by Iranian state media saying a new security belt would extend from the Strait of Hormuz to the Bab El-Mandeb Strait off Yemen, and from the Gulf to the Red Sea. Adding to concerns, Yemen's Iran-aligned Houthis said on Monday they would ban ships linked to Israel from the Red Sea following Israel's renewed military attacks on Iran.
In response to the supply crisis, OPEC+ agreed on Sunday to raise its oil output targets for the fourth time in four months. However, analysts said the move was unlikely to have much impact, as several OPEC+ members, including Russia, have struggled to meet their production targets. They cited disruptions linked to the closure of the strait and Ukrainian drone attacks that have affected Russia's production capacity.
Demand-Side Factors and Pricing
On the demand side, Saudi Arabia has cut its official selling prices for crude oil to Asia for July for a second straight month, indicating softer demand expectations. The Middle East crisis has now crossed the 100-day mark, with diplomatic efforts yet to produce a breakthrough. Tehran has repeatedly said that any agreement with Washington to end the conflict must include an end to Israel's military operations in Lebanon.
| Contract | Price | Change | % Change |
|---|---|---|---|
| WTI (NYMEX) | $90.78/barrel | -$0.52 | -0.57% |
| Brent (ICE) | $93.77/barrel | -$0.48 | -0.51% |
Outlook
The immediate easing of attacks has provided a temporary reprieve, but the underlying supply risks remain. The Strait of Hormuz chokepoint and the Houthi Red Sea restrictions continue to threaten energy flows. OPEC+'s output increases may be insufficient if member countries cannot meet their quotas. For commodity traders and procurement teams, the key data releases to watch include weekly US EIA inventory data and any further diplomatic developments. The conflict, now over 100 days old, shows no signs of a swift resolution, keeping the oil market on edge.
Sources:
