By Scott DiSavino
NEW YORK, June 9 (Reuters) – Oil prices fell about 5% on Tuesday after Iran and Israel said they had halted attacks on each other following an appeal from U.S. President Donald Trump.
Brent futures fell $4.30, or 4.6%, to $89.95 a barrel at 12:38 p.m. EDT (1638 GMT). U.S. West Texas Intermediate (WTI) crude slid $4.95, or 5.4%, to $86.35.
That put Brent on track for its lowest close since April 17 and WTI on track for its lowest close since May 29.
Crude prices briefly pared losses around midday, down by just $2 a barrel, after Trump said Iran shot down a U.S. Apache helicopter that was patrolling the Strait of Hormuz overnight.
Trump added that the U.S., “must, of necessity, respond to this attack.”
On Monday, Israel and Iran halted direct attacks on each other after Trump urged them to stop. Tehran said it would resume hostilities if Israel continued to attack the Hezbollah militia in Lebanon.
On Tuesday, Israel struck the historic port city of Tyre in southern Lebanon, killing at least eight people. Iran has so far held back from attacking.
“The oil market is drafting lower … as the latest shooting match between Israel and Iran was diffused in favor of a ceasefire and as Trump continues to talk the market lower by suggesting that an end of the war with Iran could be reached in 2-3 days with negotiations in their final stages,” analysts at energy advisory firm Ritterbusch and Associates said in a note.
Iran has continued to block most shipping through the Strait of Hormuz, which before the war carried a fifth of the world’s crude oil and liquefied natural gas. Washington has imposed its own blockade of Iranian ports.
U.S. Energy Secretary Chris Wright said on Tuesday that ship traffic in the Gulf and oil exports through the Strait of Hormuz are rising even as Washington and Tehran struggle to reach a deal on ending their more than three-month-old war.
Elsewhere around the world, China’s May crude imports slumped 29% to their lowest levels in eight years, extending a sharp decline in the world’s largest oil importer that is helping keep a lid on global oil prices.
WORLD SUPPLY, DEMAND AND INVENTORIES
The U.S. Energy Information Administration (EIA) projected the Iran war would slash world petroleum production to an average of 99.0 million barrels per day (bpd) in 2026, down from a record 106.1 million bpd in 2025.
At the same time, EIA forecast world oil demand would slide to 102.9 million bpd in 2026, down from a record 104.0 million bpd in 2025. The agency said countries would pull the extra needed barrels from storage, cutting inventories in the Organization for Economic Cooperation and Development (OECD) to their lowest level since 2003.
Looking ahead, the oil market awaited weekly storage reports from the American Petroleum Institute (API) trade group later on Tuesday and the EIA on Wednesday.
Analysts estimated energy firms pulled 3.4 million barrels of crude from U.S. storage during the week ended June 5.
If correct, that would be the first time energy firms pulled crude out of storage for seven weeks in a row since January 2025. It compares with a decrease of 3.6 million barrels in the same week last year and an average decline of 0.7 million barrels over the past five years (2021 to 2025). [EIA/S] [API/S]
(Reporting by Scott DiSavino in New York, Seher Dareen and Robert Harvey in London, Pooja Menon in Bengaluru and Emily Chow in Singapore; Editing by Sonali Paul, Tomasz Janowski and David Gregorio)
