Brent crude, the international benchmark, was trading at below $74 a barrel on Tuesday, a drop from the $80 range.
Oil prices fell about 5 percent Tuesday on reports that Israel had assured the Biden administration that it did not intend to attack Iranian nuclear sites or oil infrastructure. Brent crude, the international benchmark, was trading at below $74 a barrel on Tuesday.
Fears that the increasing hostility between Israel and Iran would disrupt oil flows from the Middle East had driven up prices for Brent to the $80 a barrel range.
Over a year of war in the Middle East, oil prices have not risen significantly, in large part because the fears of supply disruptions have been counterbalanced by worries over weak demand for oil, especially in China. Oil traders and analysts also say increased supplies from producers like the United States, Brazil and Guyana have also helped tamp down prices.
The International Energy Agency, a Paris-based intergovernmental organization that analyzes energy security, has said that the world may be entering a prolonged period of weakening oil consumption as electric vehicles, energy efficiency and changed behaviors like working from home trim oil use.
More recently, markets have also focused on the prospect of Saudi Arabia and other members of OPEC Plus increasing their oil production. The cartel’s members have been restricting output by more than five million barrels of oil a day in an effort to prop up prices.
The U.S. oil benchmark also fell about 5 percent, to $70.19 a barrel. And according to the AAA motor club, the average price for gasoline on Tuesday was $3.20 a gallon, little changed from a month ago but down 40 cents a gallon from a year earlier.
Stanley Reed reports on energy, the environment and the Middle East from London. He has been a journalist for more than four decades. More about Stanley Reed
See more on: Organization of the Petroleum Exporting Countries (OPEC), President Joe Biden, International Energy Agency
