FX.co ★ Oil Hovers Near 11-Week Lows

Crude oil hovered near $86 per barrel on Wednesday, trading close to an eleven-week low amid indications of easing tensions between the US and Iran. President Donald Trump signaled that additional military strikes against Iran may no longer be necessary, lifting hopes for a diplomatic resolution. In parallel, Congressional Democrats are weighing whether to use the upcoming government funding deadline as leverage to press the Trump administration to wind down the conflict.

Nonetheless, uncertainty remains high. Iran is insisting on relief from US sanctions and the lifting of the naval blockade as preconditions for entering peace talks. At the same time, oil shipments from the Middle East have almost returned to prewar levels, even as attacks on vessels in the Strait of Hormuz continue. The US oil benchmark has dropped nearly 20% from its late-October peak, erasing much of its recent rally as prospects for de-escalation improved and regional oil exports recovered.