Oil prices dipped on Tuesday as diplomatic efforts in the Middle East raised hopes for a resolution to the U.S.-Israeli war with Iran, easing some supply concerns. Brent crude futures fell 66 cents, or 0.57%, to $115.15 a barrel, while U.S. West Texas Intermediate crude dropped 44 cents, or 0.43%, to $101.32. The decline came as Saudi Arabia, Turkey, and Pakistan held talks with Iranian officials in Tehran, aiming to prevent further military escalation and strengthen regional cooperation.
Despite the diplomatic progress, oil prices remained near six-month highs due to ongoing attacks on Saudi Arabia by Iran-aligned Houthis. The conflict has disrupted commercial shipping in the Strait of Hormuz, a critical waterway for global energy supplies. October has seen a surge in maritime security incidents, exacerbating supply worries. Last week, Brent prices spiked to over $117 a barrel, the highest level since April, following Iranian attacks on tankers in the strait.
Elsewhere, Russian refiners are increasing diesel production in October after receiving export quotas from the government. This move follows a supply agreement between the Kremlin and the U.S. The combination of geopolitical tensions and shifting production dynamics continues to influence oil markets, keeping prices volatile.