Oil prices slide on hopes of diplomacy in Iran war

The WTI October contract that is expiring on Tuesday fell $1.97, or 1.96%, to $98.33 a barrel ​following a 1.58% drop in the previous session.

"It seems that a degree of risk premium is ⁠being removed from oil prices on hopes that a diplomatic path to de-escalate the US-Iran war may arrive this week," said Tim ​Waterer, chief market analyst at KCM Trade. "Whether that hope proves to be warranted or not is another question.

Time will tell. "Read:Stocks gain over 218 points as oil prices easeWTI broke ​a key psychological support at $100 a barrel while some investors may have rolled over their positions in the October contract a day ahead of expiry to November, a Singapore-based broker said.

Iran and the US exchanged new threats on Sunday, although US 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.

Iran has conveyed its conditions to mediators ​for re-engaging in negotiations aimed at ending the war with the US, Al Jazeeracited Iran's security chief, Mohsen Rezaei, as saying in an interview ‌on Saturday.

However, ⁠tensions in the Middle East remained elevated as Yemen's Houthis said they attacked "sensitive" sites in the Saudi capital of Riyadh on Saturday with missiles and drones, as well as an Aramco facility in the Red Sea city of Yanbu, a key oil export hub. On Monday, a spokesman for the Revolutionary Guards, Hossein Mohebbi, said.

Iran would use new weaponsand target locations not previously attacked if the US ​launched a new offensive against ​it, ⁠news agency. China has asked Iran to help rein in the Houthis after an appeal to Beijing by Saudi Arabia following the attacks, with the matter.

The attacks by the ​Houthis on Saudi Aramco's East-Westpipelinehave prompted the state energy firm to increase exports through the Strait ​of Hormuz this ⁠month and next after halting some shipments via Yanbu.

"Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia's East-West pipeline," JPMorgan analysts said in a September 18 note, adding that the total oil flows averaged 17.1 million bpd in the past 10 days, just 6.1 ⁠million bpd ​below the 2025 average.

"The most notable pivot has come from Saudi Arabia," the ​analysts said, as satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million bpd over the past six days, up from just 700,000 ​bpd in August.