Oil prices hit 11-day low on hopes of US-Iran diplomacy

Global oil prices fell to their lowest level in more than a week on Monday (September 21) as hopes grew that diplomatic efforts could help ease the conflict between the United States and Iran.

Brent crude futures fell $2.16, or 2.08 per cent, to $101.71 a barrel, while US West Texas Intermediate (WTI) dropped $2.15, or 2.14 per cent, to $98.15.

Both benchmarks touched their lowest levels since September 10.

Tim Waterer, chief market analyst at KCM Trade, said some of the risk premium built into oil prices appeared to be easing on expectations that a diplomatic path to de-escalate the US-Iran conflict could emerge this week.

The price decline came despite continued tensions in the Middle East. Iran and the US exchanged fresh threats over the weekend, while US President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian, who is expected in New York for the UN General Assembly.

Meanwhile, Iran-backed Houthi fighters claimed attacks on targets in Saudi Arabia, including sites in Riyadh and an Aramco facility in Yanbu, a key oil-export hub. Houthi attacks on Saudi Arabia’s East-West pipeline have disrupted shipments through Yanbu, prompting Riyadh to increase crude exports through the Strait of Hormuz.

Despite the disruption, Saudi oil exports have recovered to more than 4 million barrels per day in September, up from 2.4 million bpd in August, according to Kpler data cited by Reuters.