The global benchmark dropped more than 3% to around $90.50 a barrel on Tuesday after Israel and Iran agreed to pause direct retaliatory strikes, raising hopes that fragile diplomatic efforts could prevent further escalation. The move triggered a sell-off in war-risk premiums that had earlier lifted prices closer to the $100 mark.
Weak demand signals from China added further pressure, with the world’s largest oil importer recording its lowest crude imports in eight years as refiners leaned on domestic inventories.
The decline came alongside the release of US trade data showing the April trade deficit remained nearly unchanged at $55.9 billion. The figures also pointed to shifting energy trade patterns, with US crude exports rising by $6.4 billion as buyers turned to North American supplies amid disruptions in global shipping routes.
Meanwhile, heavy US imports of semiconductors and computer hardware linked to artificial intelligence infrastructure continued to weigh on the trade balance.
With OPEC+ approving only a modest production increase of 188,000 barrels per day for July, analysts said the market focus is shifting. Rising US exports and cooling demand growth are reducing concerns over a supply squeeze that dominated sentiment earlier this year.
