International oil prices declined on Tuesday after Iran and Israel indicated they had halted attacks against each other following an appeal from U.S. President Donald Trump, easing immediate concerns over further escalation in the Middle East conflict.
As of 10:00 a.m. WAT, Brent crude traded at $92.41 per barrel, down 1.95 per cent, while U.S. West Texas Intermediate (WTI) crude fell 2.32 per cent to $89.18 per barrel, extending losses after a sharp rally in the previous session.
The latest decline came as traders reassessed geopolitical risks after both Tehran and Tel Aviv signalled a pause in military operations. However, market sentiment remained cautious as both sides warned that hostilities could resume if tensions reignite.
The development reversed part of Monday's gains, when renewed Israeli strikes on Iranian targets and attacks in Lebanon had pushed crude benchmarks up by about five per cent amid fears of wider supply disruptions across the region.
Analysts said the market's reaction reflects a cautious approach to what remains a fragile and uncertain situation.
According to market observers, investors have previously responded positively to signs of de-escalation in the conflict, only for renewed fighting to trigger fresh volatility. As a result, traders continue to monitor developments closely for indications of whether the current pause can evolve into a more durable ceasefire arrangement.
Despite the decline in prices, supply concerns have not disappeared entirely.
Shipping movements through the Strait of Hormuz remain a key focus for the market. The strategic waterway, which before the conflict handled roughly one-fifth of global crude oil and liquefied natural gas shipments, continues to face significant restrictions. Tehran has maintained limits on shipping activity through the corridor, while the United States continues enforcement measures against Iranian ports.
Adding another layer of uncertainty, the U.S. military on Monday said it intercepted and disabled an empty oil tanker in the Gulf of Oman after the vessel allegedly attempted to sail to an Iranian port in violation of existing restrictions.
While geopolitical risks remain elevated, weaker demand indicators also contributed to downward pressure on crude prices.
Recent trade data showed that China's crude oil imports fell sharply, dropping by 29 per cent last month to their lowest level in eight years. Imports averaged about 9.3 million barrels per day in April, significantly below levels recorded before the outbreak of hostilities involving Iran.
The slowdown in Chinese buying has reinforced concerns about global oil demand growth at a time when markets are already balancing supply disruptions against weakening consumption trends.
Nevertheless, some analysts believe the downside for oil prices could remain limited if global inventories continue to tighten.
Industry data have pointed to declining crude stockpiles in several regions, raising concerns that a sustained drawdown in inventories could eventually support higher prices. Market watchers note that if available supplies continue to shrink while demand stabilises, competition for physical barrels could intensify later in the year.
For now, however, the easing of immediate conflict concerns has outweighed supply fears, pushing both Brent and WTI lower as traders await clearer signals on the durability of the Iran-Israel pause and its implications for global energy markets.