Global oil prices dropped to their lowest level since August, with Brent crude falling below $90 a barrel as hopes grew that tensions between the United States and Iran could ease without further military attacks.
During early European trading on Tuesday, November 10, Brent crude fell to $89.70 a barrel, while US West Texas Intermediate (WTI) dropped below $85, extending a sharp decline in international oil markets.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, said US President Donald Trump’s suggestion that further strikes against Iran might not be necessary had strengthened hopes for a diplomatic solution.
The decline followed reports that Washington was considering avoiding additional military action against Iran as diplomatic efforts continued, with Qatar playing a role in negotiations.
Investors responded to the possibility of reduced tensions in the Middle East, where months of conflict have disrupted energy supplies and raised concerns about the security of major oil transportation routes.
Brent crude has lost approximately 25% of its value since reaching more than $117 a barrel in late October.
The latest decline followed a 17% weekly drop, the largest since the early stages of the COVID-19 pandemic, when global demand for oil collapsed.
Despite the falling prices, the situation in the Middle East remains uncertain.
Recent attacks on Saudi Arabian energy infrastructure, including the East-West pipeline, have raised concerns about further disruptions to oil transportation.
The Strait of Hormuz, one of the world’s most important routes for transporting oil and natural gas, also remains a major concern for international energy markets.
Although crude oil supplies have begun recovering, diesel and other refined petroleum products remain relatively expensive because of continuing supply constraints.
For countries such as Rwanda, which depend on imported petroleum products, sustained reductions in international oil prices could eventually help lower import costs.
However, the decline does not automatically mean petrol and diesel prices will fall at local filling stations. Domestic prices also depend on transport costs, exchange rates and government pricing decisions.
The direction of global oil prices will largely depend on whether diplomatic negotiations reduce tensions in the Middle East and allow energy supplies to return to normal.
Elie GATETE
RADIOTV10