Oil prices declined for a second consecutive session on Tuesday, settling at their lowest levels since August 31, as comments from U.S. officials eased concerns about further military escalation with Iran and the potential for additional disruptions to Middle East oil supplies. Brent crude futures fell $1.08, or 1.2%, to settle at $91.49 per barrel, while U.S. West Texas Intermediate (WTI) crude declined $0.81, or 0.9%, to $86.04 per barrel. Both benchmarks remained in technically oversold territory after extending the previous session’s losses.

Prices recovered some ground after initially falling more than $3 per barrel, following comments from Iranian security official Mohsen Rezaei that no negotiations were currently taking place between Tehran and Washington. However, markets continued to respond to a more conciliatory tone from the Trump administration. U.S. Secretary of State Marco Rubio said economic sanctions and the naval blockade were working, reducing the need for additional major military operations against Iran. President Trump also indicated he would hold off on further strikes following appeals from regional leaders, including Qatar’s prime minister.

Despite the easing of immediate military concerns, tensions across the Middle East remain elevated. The Saudi-led military coalition reported intercepting missiles launched by Yemen’s Iran-backed Houthis toward Saudi cities, while the Houthis reported Saudi airstrikes against the Yemeni capital of Sanaa. The lack of progress toward a formal agreement between Washington and Tehran continues to leave regional oil shipments vulnerable to further disruption.

Developments in Russia and Ukraine also remain relevant to the global oil supply outlook. Officials from both countries met in Abu Dhabi for their first peace talks since February, with U.S. officials describing the discussions as productive. However, significant differences remain between the two sides. A potential settlement could eventually ease restrictions on Russian energy exports and add further supply to an already well-supplied global market.

Concerns about inflation and slowing petroleum demand are adding another source of pressure on oil prices. U.S. consumer prices increased more than expected in October, raising expectations that the Federal Reserve could continue tightening monetary policy. Higher interest rates could weigh on economic growth and reduce energy consumption. The Energy Information Administration (EIA) also projected that global petroleum consumption would decline from a record 104.4 million barrels per day in 2025 to 102.4 million barrels per day in 2026, highlighting the growing concern that elevated energy prices are contributing to demand destruction.