WTI crude futures traded below $90 per barrel on Tuesday, extending losses after a roughly 10% plunge in the previous session. The sharp decline followed President Donald Trump’s decision to postpone planned strikes on Iran’s energy infrastructure for five days and his claim that “productive” talks with Tehran are underway. The delay was widely interpreted as an attempt to stabilize oil markets, with Trump suggesting prices would “drop like a rock” once an agreement is reached.
Iran, however, rejected assertions that any negotiations are taking place, while Israel has continued its attacks on Iranian targets. Against this backdrop, markets are beginning to price in the possibility that the Strait of Hormuz could reopen. The conflict had effectively shut this vital global chokepoint—through which about 20% of the world’s oil supply typically passes—forcing Middle Eastern producers to sharply reduce output. Iran still maintains tight control over the narrow passage, allowing only a limited number of vessels to transit based on political and strategic alignments.
