WASHINGTON (dpa-AFX) - Adding to yesterday's losses, crude oil prices have slumped again on Tuesday as concerns of U.S.-Iran re-escalation faded after U.S. President Donald Trump agreed to maintain a status quo in the U.S.-Iran crisis. This follows his remarks on Sunday when he stated that a renewal of attacks would be highly unlikely.
WTI Crude Oil for December delivery was last seen trading down by $0.97 (or 1.12%) at $85.88 per barrel.
Since late October, crude oil prices received support from media reports stating that the U.S. was preparing to to re-commence attacks on Iran after the November midterm elections.
After the results went against the current administration, Trump adopted a softer approach in dealing with Iran.
In an interview with CNN that aired on Sunday, Trump remarked that the efforts to end the war with Iran through peace talks were going on well and as long as they show progress, a renewal of attacks on Iran would be highly unlikely.
On Monday, with supply concerns lowered, crude oil prices went into a tailspin.
Neighboring countries of Iran have been suffering from the counter-attacks by Iran when U.S. forces launch strikes against Iran. In addition, Iran's closure of the Strait of Hormuz has crippled their economies.
With support from Saudi Arabia, Turkey, and Egypt, Qatar is leading the efforts to bring about a truce between the U.S. and Iran.
Yesterday, Qatar's Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani met with Trump to discuss the means to end the war.
Yesterday, Israel Hayom reported that Qatar's PM carried a proposal from Iran to reopen the Strait of Hormuz if the U.S. agrees to lift its blockade on Iran and release $8 billion worth of Iran's assets frozen in foreign countries.
Today, Trump messaged through Truth Social that at the request of Iran's neighbors, he agreed to maintain the status quo. The current naval blockade and the new Operation Iron Gate will continue to be in force.
Categorically stressing that Iran cannot have a nuclear weapon, Trump remarked of positive momentum in the efforts to end the conflict.
Though Trump emphasized that U.S. forces are locked, loaded, and ready to go, if required, he stated that it would be unnecessary.
U.S. Secretary of State Marco Rubio also observed that the U.S. economic sanctions and naval blockade are working so well that there would be no need for a major combat operation against Iran.
Striking a different tone, the Secretary of Iran's Supreme National Security Council Major General Mohsen Rezaei warned against 'deceptive statements' by U.S. officials. Rezaei denied any meetings between U.S. and Iranian officials.
Rezaei observed that after presenting its seven conditions to the U.S., Iran is waiting for its response.
Further, Rezaei added that all U.S. claims about ongoing negotiations with Iran and a meeting in Qatar are lies. He stated that the U.S. made such claims to bring down oil prices and ease the economic pressure in the U.S.
A section of media reported about a meeting between Rezaei and U.S. Vice President JD Vance. Iran's Foreign Minister Abbas Araghchi rejected the reports, stating there were no plans for such talks.
Energy experts are watching the developments with cautious optimism since no formal deal has been confirmed, and in addition, the Strait of Hormuz is yet to be fully reopened.
Elsewhere in the Middle East, the Houthi-Saudi Arabia conflict kept the Middle East tensions alive.
The Saudi Arabia-led coalition announced intercepting one ballistic missile and another cruise missile fired towards Riyadh, and another ballistic missile aimed at its southern region.
On Sunday, the Iran-backed Houthi militants managed to attack Aramco Tower in Riyadh, causing minor damage to its structure.
On Monday, the group targeted the East-West oil pipeline in the Medina region, causing a minor fire.
The U.S. dollar index was last seen trading at 102.25, up by 0.60 (or 0.59%) today.
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