Oil Prices Fall on Hopes for Diplomatic Breakthrough in US-Iran War

Oil prices fell to their lowest in over a week on hopes that diplomacy in the US-Iran war may improve this week. The price of Brent crude futures dropped to $101.71 a barrel, down $2.16 or 2.08% from Friday's close. This decline comes as investors anticipate a partial recovery in shipments from Saudi Arabia despite ongoing attacks by Yemen's Houthis.

Tim Waterer, chief market analyst at KCM Trade, said 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.' However, he cautioned that whether these hopes prove warranted or not remains to be seen.

The attacks by Yemen's Houthis have disrupted Saudi Arabia's East-West pipeline, but the state energy firm has managed to increase exports through the Strait of Hormuz. According to JPMorgan analysts, Middle East oil flows remain surprisingly strong despite the disruption, with total oil flows averaging 17.1 million barrels per day in the past ten days.