Oil slumps following Middle East de-escalation

Bloomberg reports that oil prices fell following US President Donald Trump’s announcement of de-escalation in the Middle East. Brent crude dipped almost 5% to $68 per barrel in early Tuesday trading. 

Additionally, Chris Weston of Pepperstone Group Ltd. says concerns over a sharp decline in energy supplies have eased. Lower tensions in the Middle East may prompt traders to once again focus on the oil market’s fundamentals. Crude supplies are widely expected to exceed demand in the second half of 2025, Bloomberg notes. 

OPEC+, including Iran as a member, is ramping up oil production in an attempt to regain market share. The alliance plans to increase its output by another 400,000 barrels per day. Rising global crude production and waning demand, projected in the third quarter, will lead to a build-up in stockpiles. Therefore, oil prices may approach the lower end of the previous range between $60 and $65 per barrel, says Robert Rennie, Head of Commodity research at Westpac Banking Corp.