FX.co ★ Oil Prices Continue to Fall

Crude oil prices fell to around $81 per barrel on Tuesday, hitting their lowest level in more than a week, as renewed diplomatic efforts over the Strait of Hormuz improved the outlook for Middle East oil supply. Iran’s Foreign Minister Abbas Araghchi held separate talks with his Saudi and Omani counterparts, focusing on restoring security in the strategic waterway after disruptions linked to the US-Iran conflict. Oman has proposed a joint regional mechanism to manage the strait, under which Iran would be allowed to collect voluntary transit fees, a plan that has reportedly gained backing from Gulf states. Meanwhile, President Donald Trump said Washington was engaged in “good talks” with Tehran, although he warned that military strikes could resume if diplomacy fails, while Iran also issued threats of retaliation. Despite the diplomatic progress, regional risks remain elevated after Saudi Arabia intercepted drones targeting oil facilities and Yemen’s Houthi rebels claimed responsibility for an attack on the kingdom’s East-West pipeline.