Brent Oil Falls as Iran Talks Ease Supply Concerns

Oil prices extended their decline on Monday, reaching their lowest levels since September 10 as hopes of diplomatic progress between the US and Iran reduced some of the geopolitical risk premium built into crude prices. Signs of recovering Saudi crude exports through the Strait of Hormuz also helped ease immediate concerns over supply, despite continued disruptions along important Middle Eastern energy routes.

The decline followed losses recorded at the end of last week. November Brent crude settled $0.95 lower at $103.87/bbl on Friday, while October WTI fell $1.61 to $100.30/bbl. Selling pressure increased at the beginning of the new week, pushing WTI below the $100/bbl mark.

At the time of writing, Brent was trading at $101.75/bbl, down 2.04%, while WTI stood at $98.38/bbl, down 1.91%. Both benchmarks had earlier touched their lowest levels in more than a week.

Diplomatic Developments Reduce Geopolitical Premium

Market attention has shifted toward this week’s UN General Assembly in New York, where Trump said he would be open to meeting Iranian President Masoud Pezeshkian. Iran has also reportedly communicated conditions through mediators for restarting negotiations aimed at ending the conflict, raising hopes for the reopening of diplomatic channels.

However, geopolitical risks remain elevated. Iran and the US exchanged fresh threats over the weekend, while Yemen’s Iran-backed Houthis said they had targeted locations in Riyadh and an Aramco facility in Yanbu. Iran also warned that it could introduce new weapons and target previously unaffected locations if another US offensive takes place.

Saudi Oil Flows Show Signs of Recovery

Supply concerns have eased further as Saudi Arabia increases crude movements through the Strait of Hormuz following attacks on the Aramco East-West Pipeline and reduced flows through Yanbu.

Satellite data cited by JPMorgan showed Saudi oil flows through Hormuz averaging 2.9 million bpd over six days, compared with approximately 700,000 bpd in August.

Kpler data also indicated that Saudi crude exports had recovered to slightly above 4 million bpd so far in September, up from 2.4 million bpd in August. However, shipping activity through Hormuz remains well below pre-war levels, while no visible Saudi oil loadings from Yanbu have been recorded since September 16.

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