Oil prices decline amid ceasefire proposals and ongoing military strikes between the U.S. and Iran

Oil prices fell on Tuesday, with Brent crude dropping 1.1% to $88.26 per barrel and U.S. West Texas Intermediate decreasing to $82.50 per barrel. Markets are reacting to reports of mediation efforts to establish a 10-day ceasefire between the U.S. and Iran, aimed at reviving an interim memorandum of understanding signed on June 17. Despite these diplomatic overtures, military conflict persists, as both nations reported further strikes on Monday. The U.S. Central Command confirmed a new round of air strikes on Iranian cities, while the Revolutionary Guards targeted U.S. military assets. Simultaneously, the Houthi movement has threatened a naval blockade of Saudi Arabia, and a tanker in the Strait of Hormuz was reported abandoned after being struck by an unknown projectile. Analysts at ING noted that while a ceasefire could help stabilize the situation, significant obstacles remain due to ongoing casualties and deep-seated differences between Washington and Tehran. The conflict officially began on February 28 following joint U.S.-Israeli military actions.