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Global crude oil futures fell to fresh two-month lows on Tuesday as US officials ruled out major military operations against Iran and Russian–Ukrainian peace talks resumed in Abu Dhabi.

Crude benchmarks settled at their lowest levels since late August for a second straight session on Tuesday. January Brent fell $1.08, or 1.2%, to settle at $91.49 a barrel after tumbling over $3 intraday. WTI declined 81 cents, or 0.9%, to finish at $86.04, narrowing the transatlantic spread to $5.45 as technical oversold conditions set in across nearby contracts.

De-escalation signals from top diplomats accelerated the pullback. US Secretary of State Marco Rubio told G7 ministers in Paris that effective naval blockades eliminate the need for major combat against Iran, following US President Donald Trump's decision to pause strikes after Qatari appeals. Selling gained further momentum after Rubio described trilateral Russia–Ukraine talks in Abu Dhabi as productive.

Macroeconomic tightening fears compounded downward pressure. Hotter-than-expected US October consumer inflation raised expectations of a 50-basis-point Federal Reserve rate hike in December, with the Energy Information Administration projecting world petroleum consumption will decline by 2 million bpd in 2026. However, losses were capped after Iranian security chief Mohsen Rezaei denied active talks with Washington and Saudi forces intercepted Houthi missiles.