With hopes of improving diplomacy in the Iran War, oil hits a one-week low.
Oil prices fell to their lowest in more than a week on Monday on hopes diplomacy in the Iran war will get a chance this week amid a UN meet and as investors watched a partial recovery in shipments from Saudi Arabia despite continuous attacks by Yemen’s Houthis.
Brent crude futures and US West Texas Intermediate crude earlier on Monday dropped to their lowest since Sept. 10. Brent was at $101.71 a barrel by 0213 GMT, down $2.16, or 2.08%, after finishing 0.91% lower on Friday.
U.S. West Texas Intermediate crude fell $2.15, or 2.14 percent, to $98.15 a barrel after a 1.58 percent decline in the previous session.“The risk premium is being stripped out of oil prices on the back of hopes that a diplomatic solution to the US-Iran war may be found this week,” said Tim Waterer, chief market analyst at KCM Trade.Whether that hope will be fulfilled remains to be seen. “We’ll see how it goes.
The WTI broke a major psychological support at $100 a barrel while some investors may have rolled over their positions in the October contract a day ahead of expiry to November, said a broker in Singapore.
Iran and the US traded more threats on Sunday as the standoff continued, but President Donald Trump indicated he would be open to meeting Iranian President Masoud Pezeshkian, who is due in New York this week for the United Nations General Assembly.
Iran has informed mediators about its prerequisites for resuming talks to end the war with the US, Iran’s security chief Mohsen Rezaei said in an interview on Saturday, Al Jazeera reported.
But tensions in the Middle East remained elevated as Yemen’s Iran-backed Houthis said they struck “sensitive” locations in the Saudi capital Riyadh on Saturday with missiles and drones, as well as an Aramco facility in the Red Sea city of Yanbu, a vital oil export centre.
Three Iranian sources acquainted with the situation said China had asked Iran to assist reign in the Houthis following a plea to Beijing by Saudi Arabia after the strikes.
Houthi strikes on Saudi Aramco’s East-West pipeline have led the state energy corporation to boost exports through the Strait of Hormuz this and next month after halting some shipments through Yanbu.
That meant OPEC kingpin exports bounced up to around 4 million barrels per day (bpd) so far in September after falling to 2.4 million bpd in August, the lowest since at least 2013, according to interim statistics from analytics firm Kpler.”Oil flows in the Middle East are surprisingly resilient despite disruption to Saudi Arabia’s East-West pipeline,” JPMorgan analysts said in a note on September 18 adding the overall oil flows averaged 17.1 million bpd in the past 10 days, barely 6.1 million bpd below the 2025 average.“The most notable pivot has come from Saudi Arabia,” the experts said. Satellite data showed Saudi oil transiting the Strait of Hormuz averaged 2.9 million bpd over the preceding six days, up from just 700,000 bpd in August.