Oil sinks to two-month low as Trump holds off on Iran

Oil prices fell for a second straight day on Tuesday, November 10, after President Donald Trump said further US military strikes against Iran were not needed for now. Brent crude futures settled down 1.2% at $91.49 a barrel and US West Texas Intermediate fell 0.9% to $86.04, Reuters reported. Both benchmarks closed at their lowest level since August 31.reuters.com

The drop in crude has not yet reached American farms. Farmers are still paying high prices for diesel and fertilizer, costs driven up by the nearly nine-month conflict and by shipping restrictions around the Strait of Hormuz.

A pause, not a peace deal

Earlier in the session, Brent fell below $90 for the first time since August, according to CNBC. It then recovered some losses after Iranian security official Mohsen Rezaei said Tehran and Washington were not currently negotiating, Reuters reported. Brent had already fallen 5.85% on Monday, and its 16% drop the week before was its steepest weekly decline since the start of the Covid-19 pandemic, The Business Times reported.cnbc.com+2

Trump spoke after meeting Qatar's prime minister at the White House on Monday. He said "Iran militarily is effectively over" and that the war could end "fairly soon," CNBC reported. He also said the US would keep its naval blockade in the Strait of Hormuz and that its forces stayed "locked and loaded". Secretary of State Marco Rubio told Group of Seven allies that sanctions and the blockade were working, so major combat operations were unnecessary.reuters.com+2

Brent is now about 22% below the six-month high of $118 it reached on October 30. Eurasia Group analyst Gregory Brew said prices are unlikely to stay below $90 "without more durable signs of de-escalation and a US-Iran deal," according to Oilprice via Yahoo Finance. ING strategists estimated that Gulf crude exports have returned to about 80% to 85% of prewar levels. They added that refined fuel shipments have recovered to only about 35% to 40%.uk.finance.yahoo.com+1

Farmers still squeezed

The slow recovery in refined fuel shipments matters for agriculture. An October 6 study by the University of Arkansas System Division of Agriculture estimated that disruptions to fuel and fertilizer shipping could add more than $343 million to Arkansas farmers' production costs in 2026, AgroLatam reported. The study found diesel prices as much as 92% above harvest budget assumptions and urea prices up 39%.agrolatam.com

Economists at the University of Illinois warned that fertilizer may weigh even more heavily on budgets for the 2027 growing season. Anhydrous ammonia, a key nitrogen source for corn, averaged $915.50 per ton in August, about 16% higher than a year earlier. Whether cheaper crude helps farm margins will depend on local diesel prices, supplier inventories and how quickly input markets stabilize.agrolatam.com