Oil prices edged lower on Tuesday, with Brent falling about 1% as prospects for a resolution of the US-Israeli war on Iran kept supply fears at bay, even as Houthi attacks on Saudi Arabia continued.
Prices stay near six-month highs
Brent crude futures were down $1, or 0.86%, at $114.81 a barrel by 0418 GMT, while U.S. West Texas Intermediate fell 88 cents, or 0.86%, to $100.88. Brent was still trading slightly below its six-month peak.
The declines extend a pullback from Monday, when Brent settled 91 cents lower at $115.81 and WTI fell $1.51 to $101.76. Brent had settled at $116.72 on Friday, its highest close since April, capping a weekly gain of about 6%.
Last week, Brent surged above $117 a barrel, the highest since April, after a wave of Iranian attacks on tankers around the Strait of Hormuz. October’s attacks on commercial shipping near Hormuz were the highest since 2017, according to market reports.
Talks in Tehran
Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday aimed at easing tension in the Middle East. The four countries agreed to continue talks with a view to strengthening cooperation in peace and security, Iranian state media said.
“Crude oil prices are witnessing profit-taking after surging to multi-month highs,” said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, adding that renewed diplomatic efforts had raised hopes of a breakthrough in negotiations between the United States and Iran.
Houthi attacks and a fragile supply picture
Scope for peace looked fragile, however. Iran-aligned Houthis launched fresh attacks on key producer Saudi Arabia, including reported strikes on the kingdom’s East-West crude pipeline and Riyadh airport over the weekend, according to Reuters, with no immediate Saudi confirmation.
ANZ Research said the oil market is vulnerable, with stress across supply, logistics, inventories and refining. Low U.S. reserves also keep the outlook fragile, according to market commentary.
The war has placed the Strait of Hormuz at the center of the turmoil. The narrow waterway carried around a fifth of the world’s energy supplies before the conflict erupted in February.
What it means for Africa’s oil exporters
Higher crude prices have given Nigeria, Africa’s largest oil producer, a revenue boost relative to its 2026 budget, which assumed a benchmark of $64.85 a barrel and output of 1.84 million barrels a day. Daily Trust reported that production has averaged about 1.6 million barrels a day, below the target, limiting the gains.
The windfall comes with a cost at home. Fuel in Nigeria now sells for over 1,250 naira a liter at most stations, up from about 900 naira before the war, according to one report, as domestic prices track Brent after the end of the fuel subsidy. Ghana raised petrol prices 11% and diesel 26% in a single pricing window, according to a commentary.
