WTI retreats to near $89.50 following Trump’s hints of easing US-Iran tensions

• Progress in nuclear and shipping talks would make further strikes on Iran "highly unlikely", Trump said, sending WTI sharply lower.
• After $60 billion in losses, Iraq secured agreements with the US to restart oil exports through the Strait of Hormuz, offsetting those losses.
• Secretary of State Marco Rubio's warning that Iran's current negotiating demands remain unacceptable failed to prevent a decline in crude prices.

At around $89.60 during Monday's Asian session, West Texas Intermediate (WTI) oil is trading lower after a broadly unchanged previous session. The decline in crude followed comments by US President Donald Trump, who described further military strikes on Iran as "highly unlikely," conditional on substantial progress in talks over Iran's nuclear programme and the reopening of the Strait of Hormuz. Trump also recognised that the unpopular Middle East conflict had been a major factor in the Republicans' historic defeat in the recent midterm elections. The conflict has pushed up oil and petrol prices.

Whether Iran signs a strong agreement will determine any decision, Trump told CNN in a telephone interview reported by Reuters. He indicated that further military action would probably not be needed. Although he had previously signalled the possibility of renewed major attacks after the midterms, the US has not launched any large-scale military operations. Iran, for its part, has warned that it would retaliate against future strikes by targeting US and Israeli assets.

Signs of progress have also emerged from regional diplomacy. In an interview with Al Jazeera, Iraqi Foreign Minister Fuad Hussein said Iraq and the United States had reached understandings allowing oil exports to restart through the Strait of Hormuz, using a shipping lane near Oman. Underscoring the conflict's heavy economic cost, Hussein put Iraq's losses from the Iran war and disrupted oil exports at $60 billion.

Expectations that Democrats would press for a rapid end to the conflict drove a steep fall in oil prices last week, but senior officials remain sceptical. Describing Iran's current negotiating demands as unacceptable, US Secretary of State Marco Rubio played down the prospect of an immediate breakthrough.