Oil prices edge lower as Trump signals pause in Iran military action
Crude futures declined after US President Donald Trump stated that military action against Iran is not currently necessary.
Oil prices fell on Tuesday following comments from US President Donald Trump that military action against Iran is not necessary "at this point". According to the Times of India, Brent crude futures dropped 24 cents, or 0.23 per cent, to $92.33 a barrel, while US West Texas Intermediate (WTI) crude futures declined 35 cents, or 0.40 per cent, to $86.50 a barrel.
Trump told reporters on Monday that the war in Iran is "militarily is effectively over" and that the US is maintaining the status quo. The President noted that while military action does not seem necessary now, the US remains "locked and loaded" should circumstances change. He added that there is "positive momentum" toward ending the conflict.
The remarks come after the Republican Party lost both chambers of Congress to Democrats in last week's midterm elections. The Hindu reported that the eight-month-old war has contributed to a surge in fuel prices impacting the global economy.
Despite the signal of a pause, the US will maintain its naval blockade in the Strait of Hormuz. Trump noted that the US has identified infrastructure targets, including 38 bridges, to strike if military action resumes.
Iranian security council chief Mohsen Rezaei rejected reports of negotiations, accusing the US of manufacturing fake news about imaginary talks. He stated that Iran has set seven conditions for surrender.
On the supply side, a Reuters survey showed that Opec production increased in October, led by higher output in Saudi Arabia, Kuwait and Iraq. Meanwhile, Russian and Ukrainian officials were set to begin two days of US-brokered discussions on Tuesday.