Brent crude drops below $90 for the first time since August as gas and fuel shipments through Hormuz pick up

Brent crude fell below $90 a barrel for the first time since August on hopes that the Iran war is de-escalating^1,2. Recovering regional oil flows and reports that Iran may soften its position on the Strait of Hormuz eased concerns about supply shortages¹.

Shipping data pointed to a gradual recovery through the strait. The monthly tally of laden liquefied natural gas tankers exiting the Strait of Hormuz reached its highest level in October since the US-Iran war began⁷. The volume of refined products being loaded within the Persian Gulf is also rising, with most of it exiting through the strait and providing some relief to a strained market⁶.

The decline extends a move that began after President Donald Trump said on Monday that a renewed military campaign against Iran is “quite unlikely” and “doesn’t seem to be necessary”⁵.

Why it matters to investors

Traders are reacting to a change in tone from Washington. “The market continues to prioritise President Trump’s more conciliatory tone toward Iran since the midterms,” one market analyst said^3,4. Trump stopped short of saying the war was over, but his comments were the most forward-leaning in that direction since February⁵. He made them less than a week after conceding that the war was one of the reasons for the Republican defeat in the midterm elections⁵.

Lower oil prices matter for monetary policy. The Federal Reserve, European Central Bank, Bank of England and Bank of Japan have all raised rates this year, while oil prices have now dropped². Gold held a gain above $4,100 as lower oil eased inflation worries ahead of US inflation data that will inform whether the Fed raises rates next month¹⁰.

The recovery is incomplete. Liquefied natural gas shipments by Adnoc Gas through the Strait of Hormuz remain below prewar levels⁹. The company’s top executives said on Tuesday that it is studying potential new export routes, as the war continues to disrupt exports through the strait⁸.

What to watch

The key variable is whether flows through the Strait of Hormuz keep rising. Higher LNG and refined product traffic has helped ease the market, but gas shipments are still below prewar levels^6,7,9.

Adnoc Gas is not yet ready to decide on routes that would bypass the strait, and any decision would signal how long Gulf producers expect the disruption to last^8,9.

The other variable is Washington’s posture toward Tehran. Trump has described new strikes as unlikely, and markets are weighing that conciliatory tone against the absence of a formal end to the war^3,5.