Oil declines as Iran signals readiness for diplomacy to end the war
Oil prices fell on Thursday after rising 4 percent in the previous session, as Iran stated it remained open to diplomacy to end the war with the United States.
Brent crude futures dropped 94 cents, or 0.9 percent, to $102.13 a barrel, while West Texas Intermediate crude futures fell 59 cents, or 0.7 percent, to $91.56 a barrel.
A senior Iranian official told Reuters on Wednesday that the positions of Iran and the United States remained far apart on how to end the war, but diplomatic efforts must continue. This came after Iranian President [mentioning the President] told the United Nations General Assembly that Tehran would never yield to U.S. pressure.
The official added that Tehran was studying Washington’s response to its proposals to end the war. The proposals focused on lifting the U.S. naval blockade on Iranian ports and reopening the Strait of Hormuz.
The official noted that the reopening of the Strait of Hormuz and the lifting of the U.S. naval blockade on Iran were discussed during indirect talks on Tuesday.
Earlier on Wednesday, Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said the Strait of Hormuz would not be reopened unless Iran’s conditions were met.
U.S. Secretary of State Marco Rubio told reporters on Wednesday that reaching an agreement with Iran would require hard work over a period of time, adding that Trump also had military options.
This comes as traders assess potential restrictions on diesel exports.
Ultra-low-sulfur diesel futures fell about 5 percent in midday trading after the website Politico reported that the Donald Trump administration was preparing plans to impose a 90-day ban on diesel exports, but the White House denied this.
However, Bloomberg reported later in the day, citing sources, that Energy Secretary Chris Wright asked oil industry leaders to prepare for potential U.S. restrictions on diesel exports during phone calls held late on Tuesday.
Wright had stated earlier on Wednesday that a diesel export ban would not be effective, even though Trump said he would support it. Analysts and market observers warned that such a move would do little to alleviate rising energy prices but could exacerbate the global supply crisis and cause further disruption to economies.
Meanwhile, U.S. crude oil inventories rose by three million barrels to 426.4 million barrels last week, according to the Energy Information Administration.
Reuters-asked analysts had expected a decline of 641,000 barrels. Fuel inventories fell.
