Oil prices extended their decline on Tuesday, Nov. 10, as recovering Middle Eastern production and expectations of a global supply surplus added pressure to a market already retreating on signs of easing US-Iran tensions.

Brent crude fell below $90/bbl for the first time since late August. The international benchmark has now retreated nearly 24% from its Oct. 30 intraday high of $118/bbl, while US West Texas Intermediate (WTI) futures also recorded losses.

The selloff reflects a reassessment of supply risks as Middle Eastern oil production recovers despite continuing disruptions to regional shipping. OPEC crude production increased by 1.38 million b/d in October to 22.87 million b/d, according to a Reuters survey. Gains were led by Saudi Arabia, Kuwait, and Iraq, bringing output among the 11 producers surveyed to about 90% of February's prewar level.

The recovery in exports has been less consistent. Preliminary Kpler data showed crude and condensate shipments through the Strait of Hormuz, Red Sea, and Gulf of Oman averaging about 16.1 million b/d in October, down from 17.09 million b/d in September. Kpler cautioned that the October figure could be revised upward as additional shipment information becomes available.

Meanwhile, the broader global supply-demand balance has weakened. JPMorgan estimated that the oil market shifted into a surplus of 1.1 million b/d in September, widening to 1.4 million b/d in October. The bank attributed the change to recovering Middle Eastern exports, additional supply from other producing regions, and weaker consumption following months of elevated energy prices.

Easing geopolitical concerns have added to the downward pressure. US President Donald Trump said Monday that further military strikes against Iran were unlikely in the near-term following appeals from regional leaders. After meeting Qatar's prime minister at the White House, Trump suggested that the conflict could end "fairly soon," although he indicated that the US naval blockade would remain in place.

The prospect of de-escalation has reduced the immediate risk of further supply interruptions, but the regional outlook remains uncertain. Attacks on commercial vessels near the Strait of Hormuz continue.