Oil Rises as US-Iran Peace Talks Stall - Sarmad
Oil prices rose by more than one percent on Monday after U.S. President Donald Trump rejected a peace proposal from Iran to resolve their dispute and reopen the Strait of Hormuz, leading to continued tensions in the Middle East.
By 00:36 GMT, Brent crude futures rose $1.32, or 1.27 percent, to $105.64 per barrel, while U.S. West Texas Intermediate crude increased by 70 cents, or 0.76 percent, to $93.11 per barrel.
Iran announced the peace proposal last week at the United Nations General Assembly in New York, stating it had been conveyed to the Americans via Qatari mediators. Trump said on Saturday that he had rejected the plan, but told Axios in a phone interview on Sunday that he expects U.S. negotiators to hold further talks this week.
Analysts at ING Bank wrote in a note, “Geopolitical risks remain elevated, as the Houthis and Iran continued their attacks on Saudi Arabia, threatening to disrupt supply flows in the region.”
The Saudi-led coalition in Yemen said early on Saturday that it had intercepted two ballistic missiles and two drones launched by Iran-aligned Houthis toward the kingdom.
Brent crude rose 0.4 percent last week, while West Texas Intermediate crude fell 7.9 percent due to concerns that the United States might ban diesel exports to ease record-high prices, which could constrain U.S. refining products.
ING analysts said, “Refined oil products remain a pressure point, as record U.S. diesel prices are exacerbating inflation risks and sparking renewed debate over the possibility of imposing export restrictions.”
They added that any restrictions on U.S. diesel exports would shrink supplies outside the United States, with European prices likely affected by the potential decline in U.S. supply.
Meanwhile, preliminary data from Kpler on Monday showed that crude oil exports from major Middle Eastern producers rebounded in September to reach 12.8 million barrels per day, the highest level since the war began in February, as Saudi Arabia and the United Arab Emirates increased their exports.
This recovery followed a rebound in shipments through the Strait of Hormuz, which were expected to reach around 7.4 million barrels per day this month, according to the data. Saudi Arabia had shifted its exports from the Red Sea port of Yanbu to the Ras Tanura port in the east following attacks that damaged the East-West pipeline.
