Oil Prices Fall Below $80
Markets reacted to diplomatic efforts by Gulf states to ease tensions and ensure safe passage through the Strait of Hormuz, although Iran signals it is not negotiating with the US.
Markets reacted to diplomatic efforts by Gulf states to ease tensions and ensure safe passage through the Strait of Hormuz, although Iran signals it is not negotiating with the US.
Oil prices on international markets fell below the $80-per-barrel mark on Tuesday. Traders are optimistic about the intensifying diplomatic efforts by Gulf states seeking a "peace formula" to unlock the crucial Strait of Hormuz, reports Tportal.
On the London market, a barrel was trading at $79.92 in the afternoon, down $3.85 from yesterday's close. On the US market, the price fell even more sharply, by $4.16, with a barrel standing at $76.18.
The Organization of Petroleum Exporting Countries (OPEC) released separate calculations on Monday showing that the price of its members' basket of crudes fell by as much as $8.87, dropping to $79.50.
Markets were calmed at the start of the week by news that the US had backed away from a new wave of attacks on Iranian energy infrastructure. President Donald Trump said he wants to allow more time for diplomacy and on Monday highlighted "good" talks with Tehran.
A completely different message came from Esmaeil Baghei, spokesman for Iran's Foreign Ministry and a member of the negotiating team. "Iran is not currently negotiating with the US," Baghei emphasized, adding that talks with Oman exist but solely on establishing a temporary safe route through the Strait of Hormuz.
Professor Mohammad Marandi reinforced this claim, telling Al Mayadeen on Monday that when Iran says it will not negotiate, "it truly does not negotiate." He warned that despite Trump's previous threats that often ended in retreat, Iran's response to any US attack would be "devastation," retaliation, and a decisive response. Marandi stressed that Iran currently has absolutely no interest in negotiations with the United States.
Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani played a key diplomatic role on Tuesday, holding phone calls with leaders of Saudi Arabia, Oman, the United Arab Emirates, Kuwait, and Bahrain. The topics of discussion were easing tensions in the region and strengthening regional security, according to Qatar's Foreign Ministry. Doha, according to a report by Iran's Mehr agency, supports all efforts to reach a comprehensive agreement that would establish peace in the region.
Qatar had already played a key mediating role in June 2026, together with Pakistan, in establishing a framework for a peace agreement between the US and Iran, which envisioned normalizing transit through Hormuz under Tehran's control.
Despite market optimism, ING analysts Ewa Manthay and Warren Pattersson believe that Tuesday's sharp price drop is largely "exaggerated." They warn that uncertainty remains high, recalling that the situation has several times signaled easing tensions, only to change drastically.
The Strait of Hormuz remains a dangerous area for navigation. The British Maritime Trade Operations agency reported on Tuesday an incident in which a cargo ship was hit by an unknown projectile, 37 kilometers northeast of the Omani city of Al Khasab.
Meanwhile, Yemen's Ansar Allah movement has blocked Saudi ports in the Red Sea, demanding the lifting of the Saudi blockade on Yemen. Under such conditions, six supertankers under the Saudi flag changed course in the Gulf of Aden and headed towards southern Africa. Only two tankers carrying Saudi oil passed through the Bab al-Mandab Strait, shipping data showed.
