Key Points
- Brent crude oil has fallen 23% from its October high.
- Trump indicates that there will be no further strikes against Iran at present.
- Excess crude oil supply widens, and markets are beginning to discuss whether Brent prices will fall to $80
After U.S. President Donald Trump stated that the United States would temporarily refrain from taking further actions against Iran, thereby alleviating concerns about an intensifying impact on Middle East supplies, oil prices continued to fall significantly on Tuesday.
According to market reports on November 10th, as of 13:34 Greenwich Mean Time, Brent crude oil fell by 3.15% to $89.65 per barrel; West Texas Intermediate crude oil ( WTI ) fell by 2.68% to $84.52. Brent crude oil fell below $90 per barrel for the first time since August 31st.
The benchmark oil price has currently fallen by about 23% from its high of nearly $118 on October 30, giving back most of the geopolitical premium that was formed during the Iran oil conflict.
Why has the oil price fallen despite the ongoing supply risks in the Middle East?
The direct trigger was a change in Washington's attitude towards Iran.
Trump stated that, following calls from regional leaders including the Prime Minister of Qatar, there is no need for additional military strikes at this time.
Despite the ongoing attacks on merchant ships near the Strait of Hormuz, investors increasingly believe that a broader escalation of the situation may be avoided.
This change has weakened the geopolitical premium that previously supported oil prices, although concerns in the global energy market have not yet dissipated.
However, this decline is not solely driven by geopolitical factors.
JPMorgan Chase estimates that in October, global crude oil supply exceeded demand by about 1.4 million barrels per day, indicating that the market may be moving towards a surplus of supply.
OPEC Production also increased in October, with Saudi Arabia, Kuwait, and Iraq leading the way in increasing production, putting further pressure on oil prices against the backdrop of high energy prices suppressing consumption.
Oil price forecast: Will Brent fall to $80?
After Brent fell below $90, the market began to focus on the possible next downward range.
If Brent continues to remain below the $90 to $92 range, and concerns about oversupply continue to intensify, around $85 could become the next important psychological barrier.
If demand further deteriorates, or if geopolitical tensions continue to ease, $80 could also be exposed to downward risks.
From the current level of around $89.65, a drop to $80 would mean a further decrease of 10.8%.
This possibility is in line with the market's expectation of weaker oil prices in 2027.
In its October outlook, the U.S. Energy Information Administration predicts that if production and exports in the Middle East gradually recover, the average price of Brent crude oil next year will be around $84 per barrel.
However, this prediction predates the latest developments, and it does not mean that $80 has become a set target.
The Strait of Hormuz and Russian supply remain the main risks.
Despite the recent significant drop in oil prices, important supply uncertainties still exist.
Shipping disruptions around the Strait of Hormuz continue, and the United States has not yet announced a complete cessation of pressure on Iran.
Meanwhile, new Ukrainian drone attacks are reported to have reduced Russia's refining capacity by about 30%, adding further uncertainty to the global fuel market.
If the physical supply situation tightens again, these disruptions could limit the downward potential of oil prices.
Therefore, the broader outlook for the oil market depends on whether increased production and weakening demand, represented by OPEC, will outweigh the persistent geopolitical risks.
