Oil Hits Two-Month Low as Washington Rules Out Further Strikes on Iran
Key Facts
Oil prices fell to a two-month low on Tuesday, November 10, after U.S. officials played down the need for further military action against Iran, according to a Reuters report. The market move followed remarks by U.S. President Donald Trump and Secretary of State Marco Rubio ruling out a resumption of major combat operations for now. After meeting Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani on Monday, Trump said another round of strikes was "very unlikely" and "does not seem necessary." Reuters linked the drop in oil to easing concerns about further disruption to Middle East supplies. That puts economic pressure and mediation at the forefront of U.S. developments on Iran, while Trump did not rule out strikes altogether.
In Paris, Rubio explained Washington's decision to avoid major military operations, saying the economic campaign against Iran was achieving its objectives. After a meeting of G7 foreign ministers, he said, "The economic campaign is so devastating that there is currently no need for major combat operations." Reuters reported that Rubio told his counterparts that economic sanctions and the naval blockade were working effectively enough that Trump did not need to launch major operations against Iran. Four G7 diplomats also said Rubio told them the United States would continue imposing "devastating" economic costs and had options beyond war or accepting Iranian demands he described as unacceptable. The remarks reflect the administration's resolve to maintain pressure while keeping negotiations open.
Rubio said Washington was continuing its economic pressure and naval blockade, adding that the administration had launched an operation called "Iron Gate" to cut off land routes Iran uses to transport weapons and advanced technology. Axios, meanwhile, reported that Israel favored resuming strikes, while most Gulf countries opposed that option. The report described divisions over the Iran policy within the U.S. administration as well, with regional allies on both sides of the dispute. The divergence makes Qatari mediation part of efforts to keep escalation under control. The Qatari prime minister said he wanted China and European countries involved as guarantors to help ease Iran's concerns that Washington could resume the war after an agreement was reached.
According to Axios, the mediation's main sticking points are which side will begin de-escalation steps and what confidence-building measures both sides will accept. Trump told Reuters on Sunday, November 8, that the chance he would order new attacks on Iran was "very small" as long as talks to end the conflict were making progress. That came despite reports of ships being struck in or near the Strait of Hormuz, the agency said. The following day, U.S. and Gulf officials questioned whether an agreement could be reached soon, and Rubio said he did not believe a diplomatic breakthrough was imminent. By November 10, the conflict had lasted more than 8 months, while Trump's remarks continued to signal a low likelihood of renewed major war, without Washington accepting Iran's existing ceasefire plan.
In Wednesday, November 11, trading, oil prices edged higher after recovering from a two-month low, as investors watched for signs of de-escalation between the United States and Iran. January Brent futures rose 0.5% to $92.02 a barrel, while West Texas Intermediate crude futures gained 0.3% to $86.34. The rise followed Tuesday's decline, which Reuters linked to easing concerns about further supply disruption. The next day's price action shows crude continued to respond to signals on the military course and diplomatic efforts. Details of de-escalation and confidence-building measures remained under negotiation, according to Axios.