FX.co ★ Oil Falls on Hopes of US-Iran Diplomacy

Crude oil slipped to $98 a barrel on Tuesday amid rising hopes for diplomatic progress between the United States and Iran. Pakistan’s army chief, Field Marshal Asim Munir, held talks in Tehran with senior Iranian diplomatic and military officials to discuss bilateral relations and the status of indirect negotiations with Washington.

Officials on both sides have acknowledged in recent weeks that messages and proposals are being exchanged through mediators, but the scope of their disagreements on core issues remains opaque. Earlier this month, US President Trump said American forces would not launch attacks on Iran before the midterm elections.

Tensions in the region have nonetheless intensified, with attacks on commercial shipping and strikes targeting Saudi Arabia escalating. At least 18 vessels have come under fire over the past two weeks. On Tuesday, Iran’s Islamic Revolutionary Guard Corps (IRGC) said two “non-compliant” oil tankers had been hit in the Strait of Hormuz.

Foreign Ministry spokesperson Esmaeil Baqaei warned at a weekly press conference that Iran would respond to any US attack “in equal measure, if not more forcefully.”