Oil prices fell by nearly 2% during Asian trading, extending losses from the previous week as investors focused on diplomatic efforts aimed at ending the conflict between the United States and Iran. At the same time, tensions remained elevated following fresh attacks by Yemen’s Iran aligned Houthi group.
Brent crude futures for November delivery fell 1.8% to $101.99 per barrel, while West Texas Intermediate crude futures declined 2.1% to $98.24 per barrel. Brent had already recorded a weekly loss as signs of possible diplomatic progress and efforts to restore disrupted Saudi supplies eased some of the market’s immediate concerns over crude availability.
U.S. President Donald Trump said in an interview with Fox News that he would likely be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York this week. Any progress toward negotiations could reduce the geopolitical risk premium currently reflected in crude oil prices.
On the other hand, the latest Houthi attacks highlighted the risks facing energy infrastructure and shipping operations across the region. The group launched missiles and drone attacks toward Riyadh, prompting Saudi Arabia to issue air raid alerts for the capital. The attacks came as the Houthis intensified their campaign against Saudi Arabia amid the wider conflict between the United States and Iran.
Renewed tensions have raised concerns over further disruptions to Saudi crude exports. Saudi Arabia’s East West pipeline, which carries oil from the kingdom’s eastern fields to the Red Sea, remains affected by the attacks, while Riyadh continues to explore alternative routes for moving shipments to international markets.
Reports that Saudi Arabia has been offering additional crude cargoes to Asian refiners through ship to ship transfers off the Omani port of Sohar have helped ease concerns over an immediate shortage. However, the conflicting signals coming from diplomatic negotiations and military developments mean that oil prices remain highly sensitive to any new developments on either front.
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