Iran Peace Talks Send Oil Prices Tumbling Amid Diesel Export Ban Speculation

Oil prices fell by about 2% on Friday as hopes for a truce between the US and Iran grew, along with talk of a potential ban on diesel exports. Despite these developments, concerns remain that Houthi fighters' attacks against Saudi Arabia could disrupt oil supplies from the Middle East.

The Brent futures price dropped $2.28 (R37.17) or 2.1%, to settle at $104 a barrel. US and Iranian negotiators in New York are exploring a phased path out of war, which would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade on Iran.

Iran has stated it will show no flexibility over its nuclear program, with a senior official saying that reopening the Strait of Hormuz requires lifting a US naval blockade on Iranian ports. The complex is coming under pressure as traders assess the possibility of a diesel export ban and diplomatic progress towards opening the Strait of Hormuz.