Oil slides nearly 3% as Trump signals scrapping $4 billion US aid to Israel; US stock futures recover

Crude oil prices fell sharply on Tuesday after US President Donald Trump said Washington would stop providing around $4 billion in annual aid to Israel after the end of 2026, easing some concerns over geopolitical tensions in West Asia. US equity futures also recovered from early losses, while the dollar remained largely unchanged.

Brent crude futures declined 1.15% to around $103.59 a barrel in afternoon trading, after falling as much as 3.3% to $101.32. US West Texas Intermediate (WTI) crude was down 2.2% at approximately $94.30 a barrel.

Trump made the comments in an interview with Fox News as voting began in the US midterm elections. He said he and Israeli Prime Minister Benjamin Netanyahu had agreed months earlier that the US would end its annual financial assistance to Israel, adding that the country was now capable of supporting itself. Trump, however, u that Washington would continue selling weapons to Israel.

Oil prices remain sensitive to West Asia tensions

Crude oil prices remained volatile as markets weighed diplomatic efforts to ease tensions between Washington and Tehran against continued military activity in the region.

Hopes of progress in mediation efforts had put pressure on oil prices in the previous session, with Brent crude falling around 7%. Qatar had said both the US and Iran remained committed to negotiations, raising hopes that diplomatic efforts could help contain the conflict.

However, reports of US strikes on Iran’s Qeshm Island, located near the strategically important Strait of Hormuz, added to concerns over a possible escalation.

For oil markets, the key concern remains the security of shipping through the Strait of Hormuz, a critical route for global crude and liquefied natural gas supplies. Any disruption to traffic through the waterway could push energy prices higher.

US stock futures recover

In equity markets, S&P 500 futures rose 0.14%, recovering from earlier losses. The softer oil prices provided some support to market sentiment, although investors remained cautious ahead of the US midterm election results.

Concerns over technology earnings and the scale of artificial intelligence-related spending also remained in focus.