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Oil Prices Rise as U.S.-Iran Talks Fuel Diplomacy Hopes

Oil Prices Rise as U.S.-Iran Talks Fuel Diplomacy Hopes. Source: Image by Markus Distelrath from Pixabay

Oil prices moved higher in Asian trading on Tuesday, snapping a four-session losing streak as investors assessed the possibility of renewed U.S.-Iran talks during this week’s United Nations General Assembly in New York.

Brent crude futures for November delivery rose 0.6% to $100.89 a barrel as of 01:15 GMT, while October West Texas Intermediate crude futures gained 0.4% to $96.19 a barrel.

The rebound followed steep losses on Monday. Brent settled 3.4% lower, while WTI dropped 4.5%, leaving both benchmarks at their lowest closing levels since September 9.

Attention is turning to potential diplomatic progress between Washington and Tehran. U.S. President Donald Trump has said he is open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the U.N. General Assembly. Iran has also communicated conditions for restarting negotiations through mediators, raising expectations that diplomacy could ease regional tensions.

Oil supply concerns have moderated after Saudi Arabia reportedly increased crude shipments through the Strait of Hormuz following disruptions to its East-West pipeline. Saudi oil flows through the strategic waterway averaged about 2.9 million barrels per day over the past six days, according to satellite data cited by Reuters, significantly higher than August levels.

However, risks to Middle East oil supplies remain. Yemen’s Iran-aligned Houthi movement has continued attacks on Saudi targets, while constraints persist on some Saudi export routes. Britain has also agreed to provide limited military support to Saudi Arabia amid the Houthi attacks.

Separately, the Trump administration has proposed investing $5 billion in a new fund designed to help Middle Eastern countries rebuild energy infrastructure damaged during the Iran war and reduce dependence on the Strait of Hormuz, according to the Wall Street Journal.

Crude traders are also monitoring Trump’s planned meeting with Chinese President Xi Jinping later this week. With China ranking as the world’s largest crude importer, developments in U.S.-China trade relations and the outlook for the Chinese economy could significantly influence global oil demand.

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