Oil Prices Fall as Markets Watch for Diplomatic Progress in Iran Conflict
Global oil prices declined on Monday, reaching their lowest level in more than a week as markets responded to expectations of possible diplomatic efforts to reduce tensions surrounding the Iran conflict.
Brent crude futures for November fell $1.78, or 1.71%, to $102.09 per barrel by 11:55am PKT. The contract had already declined 0.91% in the previous session.
US West Texas Intermediate (WTI) crude for October dropped $1.97, or 1.96%, to $98.33 per barrel. The contract is scheduled to expire on Tuesday after falling 1.58% in the previous session.
Markets Watch Diplomatic Developments
Analysts said some of the additional risk premium built into oil prices appeared to be easing as investors watched for possible diplomatic developments.
Tim Waterer, chief market analyst at KCM Trade, said expectations of a diplomatic route toward reducing tensions between the United States and Iran had contributed to the decline in oil prices.
WTI also moved below the psychologically important $100-per-barrel level.
Middle East Tensions Remain High
Despite the decline in oil prices, uncertainty in the Middle East remains elevated.
The United States and Iran exchanged fresh warnings on Sunday, while US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to travel to New York for the United Nations General Assembly.
Iran has also reportedly communicated conditions to mediators for returning to negotiations aimed at ending the conflict.
Meanwhile, Yemen’s Houthi group has claimed attacks on targets in Saudi Arabia, including sites in Riyadh and an Aramco facility in Yanbu.
Saudi Oil Shipments Under Watch
The attacks on Saudi Arabia’s East-West pipeline have affected the country’s oil-export arrangements. Saudi Aramco has increased shipments through the Strait of Hormuz after suspending some exports through Yanbu.
JPMorgan analysts said Middle Eastern oil flows have remained relatively strong despite disruptions to Saudi Arabia’s pipeline network.
According to their assessment, regional oil flows averaged 17.1 million barrels per day over the previous 10 days, while Saudi oil shipments through the Strait of Hormuz increased significantly compared with August.
Markets are now closely watching diplomatic developments, regional security conditions, and the impact of disruptions on global oil supplies.
