Oil Prices Fall Below $100 on Iran Diplomacy Hopes
Oil prices fell to their lowest levels in more than a week on Monday as investors weighed the possibility of renewed U.S.-Iran diplomacy against a partial recovery in Saudi crude exports and continued security risks across the Middle East.
What Readers Should Know
- Brent crude fell 2.08% to $101.71 per barrel in early Monday trading.
- WTI dropped 2.14% to $98.15, falling below the psychologically important $100 level.
- Markets are watching for possible diplomatic engagement between the United States and Iran during the UN General Assembly.
- Saudi crude exports have recovered to more than 4 million barrels per day so far in September, according to provisional Kpler data.
- Security risks remain elevated after renewed Houthi attacks on Saudi targets.
MONTREAL (Oil Monster): Oil prices slid to their lowest levels in more than a week on Monday as hopes for a possible diplomatic opening in the U.S.-Iran conflict reduced some of the geopolitical risk premium built into crude prices.
Investors were also assessing a partial recovery in Saudi Arabian crude exports despite continued attacks by Yemen's Iran-aligned Houthis.
Brent Falls to $101.71 as WTI Drops Below $100
Brent crude futures fell $2.16, or 2.08%, to $101.71 per barrel by 0213 GMT after settling 0.91% lower on Friday.
U.S. West Texas Intermediate crude declined $2.15, or 2.14%, to $98.15 per barrel following a 1.58% drop in the previous session.
Both benchmarks earlier touched their lowest levels since September 10.
WTI also broke below the psychologically important $100-per-barrel level. A Singapore-based broker said some of the movement may have reflected investors rolling positions from the October contract into November ahead of expiry.
Iran Diplomacy Hopes Reduce Some Market Risk Premium
Tim Waterer, chief market analyst at KCM Trade, said part of the geopolitical risk premium appeared to be coming out of crude prices as traders considered the possibility of a diplomatic path toward de-escalation.
However, Waterer cautioned that it remains uncertain whether those expectations will lead to substantive negotiations.
U.S. President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the United Nations General Assembly.
Separately, Al Jazeera cited Iranian security official Mohsen Rezaei as saying Tehran had conveyed conditions to mediators for potentially re-engaging in negotiations aimed at ending the conflict.
Houthi Attacks Keep Middle East Supply Risks Elevated
Despite the focus on diplomacy, security risks across the region remain significant.
Yemen's Iran-aligned Houthis said they attacked what they described as sensitive sites in Riyadh with missiles and drones on Saturday, along with an Aramco facility in Yanbu, a major Saudi Red Sea oil-export hub.
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China has also asked Iran to help restrain the Houthis after Saudi Arabia appealed to Beijing following the attacks, according to three Iranian sources familiar with the matter.
Saudi Crude Exports Recover Above 4 Million Bpd
Attacks affecting Saudi Aramco's East-West Pipeline have forced the company to adjust crude-export routes, increasing shipments through the Strait of Hormuz after some exports through Yanbu were halted.
Saudi exports have recovered to more than 4 million barrels per day so far in September, according to provisional data from analytics firm Kpler.
That compares with 2.4 million barrels per day in August, the lowest monthly level since at least 2013.
Saudi Hormuz Flows Rise Sharply
JPMorgan analysts said in a September 18 note that Middle Eastern oil flows had remained stronger than expected despite disruption to Saudi Arabia's East-West Pipeline.
Total regional oil flows averaged approximately 17.1 million barrels per day over the previous 10 days, around 6.1 million barrels per day below the 2025 average, according to the bank.
Saudi Arabia accounted for one of the biggest changes.
Satellite data cited by JPMorgan indicated that Saudi crude moving through the Strait of Hormuz averaged approximately 2.9 million barrels per day over the previous six days, compared with about 700,000 barrels per day in August.
Oil Market Balances Diplomacy Against Continuing Supply Risk
The latest price decline reflects a market balancing two opposing developments.
On one side, the possibility of renewed U.S.-Iran diplomacy and the recovery in Saudi crude exports have reduced immediate concerns about further supply losses.
On the other, continuing Houthi attacks, disruptions to Saudi export infrastructure and uncertainty surrounding the Strait of Hormuz mean geopolitical risk remains elevated.
Whether oil prices continue to retreat will depend in part on whether diplomatic discussions produce tangible progress and whether Saudi Arabia can sustain the recent recovery in crude exports.
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Courtesy: www.reuters.com