Energy: Oil prices fall below $90 for the first time since August

New York. The price of oil fell below $90 a barrel on Tuesday for the first time since August. The North Sea Brent variety temporarily lost up to 3.1 percent, after having already lost almost six percent the day before. Traders are increasingly betting that the war in the Middle East will end soon.

US President Donald Trump is under pressure to end the conflict after the Republicans' defeat in the midterm elections. He said further attacks on Iran were not necessary. This means that the oil market has turned significantly in the current month. At the end of October, prices had reached a six-month high.

The price of gasoline in Germany also recently fell below the two euros per liter mark. This relieves the burden on central banks, which are struggling with high inflation rates, even if price levels remain high.

An analyst at the consulting firm A/S Global Risk Management believes that the markets' bet is based on the fact that Trump will not order any new attacks on Iran after the "blue wave" in the midterm elections. Prices could fall even further, but the biggest step has already been taken.

In the US Congress, the Democrats could use the deadline for a budget dispute on December 11th to pressure Trump to end the war. The conflict that the USA and Israel started has now lasted nine months. Trump said US forces remained operational. At the same time, he signaled that he wanted to end the war. He described Iran as virtually finished militarily. The mediator is Qatar, whose Prime Minister Trump received at the White House on Monday.

Oil exports reach almost pre-war levels

It remains to be seen whether the moderate tones actually lead to progress. Political uncertainty has also been growing in Israel since Prime Minister Benjamin Netanyahu lost his parliamentary majority last month. An insider said that negotiations would continue and that no military escalation was expected.

The USA continues to rely on diplomacy and economic pressure. Iran is demanding an end to the US naval blockade of its ports and the lifting of sanctions. Washington is demanding that Tehran stop attacks on ships in the Strait of Hormuz and give in to its nuclear program.

Despite the attacks on ships, oil continues to flow out of the region. In recent months, transits through the Strait of Hormuz have recovered to the point where oil exports from the Middle East are close to prewar levels. The Saudi shipping company Bahri says it is sending some tankers through the strait in coordination with the US military.

However, risks to the region's energy infrastructure remain. On Monday, Saudi Arabia's important east-west pipeline was attacked in the area around Medina. According to the state news agency, the fire was quickly extinguished.

Other geopolitical crises also remain in view. Ukraine continues to attack Russian refineries, while Moscow continues to target its neighbor's energy and civil infrastructure. US-mediated talks between the two sides are underway in Abu Dhabi. The fact that higher-ranking diplomats are now sitting at the negotiating table than in previous rounds is seen as a sign of greater willingness to talk after months of standstill.

More: Oil is falling, but gas is as expensive as it was last at the end of 2022