Oil futures fell midday Tuesday as signs of diplomatic progress between the U.S. and Iran eased fears of immediate military escalation in the Middle East.
As of 11:20 a.m. ET, the October ICE Brent contract was trading $2.99 lower at $89.18/bbl, with November down $2.79 at $87.75/bbl. October West Texas Intermediate was trading $2.63 lower at $82.38/bbl, with the November WTI contract down $2.38 at $80.92/bbl.
Refined product futures were also falling. The September RBOB contract dropped 1.18cts to $3.259/gal, with October down 2.45cts at $2.9443/gal. September ULSD traded 0.29ct lower at $4.2639/gal, with October down 1.35cts at $4.1599/gal.
The declines followed reports of diplomacy and signs that the U.S. was emphasizing economic pressure on Iran rather than immediate military escalation. Pakistan's interior minister said Tuesday that significant progress had been made in discussions with Iran aimed at ending the conflict, and The New York Times reported that U.S. personnel who had left diplomatic missions in the Middle East could begin returning as soon as this week.
The U.S. Treasury on Monday announced sanctions targeting more than 60 entities, individuals and vessels tied to Iran, with Treasury Secretary Scott Bessent describing the campaign as an "economic D-Day." The measures have so far been met by a market response centered on the prospect of negotiations rather than a further military escalation.
