NEW DELHI: Oil prices fell to their lowest level in more than a week on Monday as investors hoped for diplomatic progress in the Iran war during this week’s United Nations General Assembly, while markets also watched signs of recovering Saudi oil shipments.
Brent crude futures for November declined $1.78, or 1.71%, to $102.09 a barrel by 0655 GMT after falling 0.91% in the previous session. US West Texas Intermediate (WTI) crude for October delivery dropped $1.97, or 1.96%, to $98.33 a barrel after declining 1.58% on Friday.
Both benchmarks earlier touched their lowest levels since September 10.
Analysts said expectations of a possible diplomatic breakthrough between the United States and Iran were removing some of the risk premium from crude prices.
Tim Waterer, chief market analyst at KCM Trade, said oil markets were pricing in hopes that a diplomatic path toward de-escalating the US-Iran conflict could emerge during the UN meetings. However, he cautioned that it remained uncertain whether those expectations would materialise.
WTI also moved below the psychologically important $100-a-barrel level. Market participants were also adjusting positions ahead of the October contract’s expiry on Tuesday, potentially contributing to price movements.
Despite hopes for diplomacy, tensions across the Middle East remained high. Iran and the United States exchanged fresh threats on Sunday, while US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian during the UN General Assembly in New York.
Iran has also conveyed conditions to mediators for potentially resuming negotiations aimed at ending the conflict, according to reports.
Meanwhile, Yemen’s Houthi group claimed attacks on targets in Saudi Arabia, including sites in Riyadh and an Aramco facility in Yanbu, a major oil export hub.
The attacks have affected Saudi Arabia’s East-West pipeline, prompting Saudi Aramco to adjust its export routes. Despite the disruption, analysts said regional oil flows remained relatively strong.
JPMorgan analysts said oil flows averaged 17.1 million barrels per day over the previous 10 days. Saudi oil shipments through the Strait of Hormuz also increased significantly, averaging 2.9 million barrels per day over six days, compared with 700,000 barrels per day in August.
The developments are keeping oil markets focused on both diplomatic efforts and risks to regional energy supplies.
