Oil prices extended their decline on Tuesday, with Brent crude falling by more than $1 a barrel as markets reacted to a pause in attacks involving the United States and Iran.
The move lower reflected growing hopes that the conflict could move toward some form of resolution. Those expectations reduced some of the risk premium that had built into crude prices while the fighting was disrupting global energy flows.
According to the available market update, Brent crude futures were down $1.47, or 1.66%, at $86.89 in early trading. The drop suggested traders were reassessing near-term supply concerns as tensions appeared to ease.
Even with the latest decline, oil markets remain highly sensitive to developments around the U.S.-Iran conflict. Any sign of renewed escalation could quickly affect prices again, especially after the recent disruption to energy trade and transport.
