Oil price, WTI, Brent: U.S.-Iran fighting pause holds

Oil prices extended losses on Tuesday after a lull in the conflict between the United States and Iran, raising hopes for an easing of tensions in the conflict in the Middle East that has disrupted energy supplies.

International benchmark Brent crude futures for September delivery fell more than 1% to $87.24 per barrel. US West Texas Intermediate crude oil futures for September delivery fell 1.22% to $81.6 per barrel.

While Tehran rejected reports that it had agreed to a 10-day ceasefire with the United States, there was a temporary pause in the clashes.

This follows reports that US ammunition is running low. President Donald Trump, who told Axios on Friday that he was considering a “major attack” on Iran, later put those plans aside due to weapons stockpile concerns, The New York Times reported.

Speaking to reporters aboard Air Force One en route to Michigan on Monday, Trump dismissed suggestions that the United States was short of weapons, saying the military had “plenty” of ammunition.

The Commonwealth Bank of Australia said on Tuesday that the recent decline in oil prices reflected easing concerns that tensions between the United States and Iran would soar, but warned that risks to global energy supplies remained high.

The bank said in a note that “a pause in US hostilities against Iran appears to have weakened expectations that the conflict will escalate to include significant attacks on civilian and energy infrastructure,” warning that disputes over the vital Strait of Hormuz shipping lane “could lead to a re-ignition of hostilities.”