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Global crude benchmarks fell roughly 5% on Tuesday, extending a three-day slide of nearly 16% as an ongoing pause in US-Iran military strikes prompted heavy selling, even as Middle East shipping chokepoints remained clogged.

Brent crude futures tumbled $4.27 (4.8%) to settle at $84.09 a barrel, marking its lowest close since July 13.

US West Texas Intermediate (WTI) dropped $3.35 (4.1%) to finish at $79.26 a barrel, its weakest level since July 16.

Downward pricing momentum was driven by cautious market optimism that several days without cross-border strikes between Washington and Tehran could pave the way for formal negotiations. However, diplomatic progress remains precarious: Iran rejected an Omani-backed proposal to manage transit through the Strait of Hormuz, counter-offering a temporary arrangement that routes opposing vessel traffic through Iranian waters.

Sustained downside was capped by ongoing physical supply disruptions and regional escalations. Saudi Aramco shut down its 400,000-barrel-per-day Jizan refinery following Houthi attacks, while militia missile strikes targeted Saudi crude tankers near the Bab el-Mandeb strait.

Meanwhile, market supply expectations were further complicated by reports that OPEC+ plans to pause planned output increases for three months starting in October.

Written by: Aiman Haikal