Oil at lowest level in over a week on hopes for diplomatic efforts on Iran
Oil prices fell on Monday to their lowest level in more than two weeks, amid hopes that United Nations meetings this week could offer an opportunity for diplomatic efforts in the war with Iran, and as investors anticipated a partial recovery in oil shipments from Saudi Arabia, despite ongoing Houthi attacks in Yemen.
Brent crude and US West Texas Intermediate (WTI) futures touched their lowest levels since September 10 earlier on Monday. Brent was trading at $101.71 per barrel by 0213 GMT, down $2.16, or 2.08 percent, after closing down 0.91 percent on Friday.
US WTI fell $2.15, or 2.14 percent, to $98.15 per barrel, following a 1.58 percent decline in the previous session.
Tim Waterer, a market analyst at KCM Trade, said, “It appears that some risk premium is being stripped out of oil prices, amid hopes that a diplomatic path to de-escalation in the war between the United States and Iran will emerge this week.”
He added, “Whether those hopes prove valid or not is another matter. Time will tell.”
A Singapore-based broker noted that US WTI broke through a key psychological support level at $100 per barrel, while some investors may have rolled their positions from October to November contracts ahead of the expiry of the October contracts.
Iran and the United States exchanged new threats on Sunday amid a stalemate, but President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week to attend the United Nations General Assembly meetings.
Al Jazeera quoted Iranian security official Mohsen Rezaei as saying in a Saturday interview that Iran had communicated its conditions to mediators for resuming negotiations aimed at ending the war with the United States.
However, tensions in the Middle East remained high. The Iran-aligned Houthis in Yemen said they attacked “sensitive” sites in the Saudi capital Riyadh on Saturday using missiles and drones, as well as an Aramco facility in the Red Sea port city of Yanbu, a key oil export hub.
Three informed Iranian sources said China had asked Iran for help in curbing the Houthis, following a request from Riyadh to Beijing after the attacks.
The Houthi attacks on Saudi Aramco’s East-West Pipeline prompted the state energy company to increase its exports via the Strait of Hormuz during the current and next months, after suspending some shipments through Yanbu.
This allowed Saudi Arabia’s exports, the largest producer in the Organization of the Petroleum Exporting Countries (OPEC), to recover to more than four million barrels per day since the beginning of September, after falling to 2.4 million barrels per day in August, the lowest level since at least 2013, according to preliminary data from Kpler analytics.
Analysts at JPMorgan, in a note dated September 18, said, “Oil flows from the Middle East remain surprisingly strong despite the disruption of Saudi Arabia’s East-West Pipeline,” adding that total oil flows averaged 17.1 million barrels per day over the past ten days, only 6.1 million barrels per day below the 2025 average.
Analysts said, “The most prominent shift came from Saudi Arabia,” noting that satellite data showed the average volume of Saudi oil passing through the Strait of Hormuz reached 2.9 million barrels per day over the past six days, up from just 700,000 barrels per day in August.
