Oil Prices Plummet as US-Iran Diplomacy Hints at Reduced Middle East Risk

Oil prices took a hit as traders reassessed the risk of Middle East disruption following reports of possible US-Iran talks and signs that Saudi shipments are holding up despite attacks.

The Brent price slipped below $102 a barrel, with traders weighing two competing storylines: more supply at risk if tensions escalate, and less risk if diplomacy cools things down.

According to Reuters, the US and Iran have traded fresh threats, but US President Donald Trump said he'd be open to meeting Iran's President Masoud Pezeshkian, who is expected in New York this week for the United Nations General Assembly. Al Jazeera also reported that Iran has passed conditions to mediators for re-engaging in talks.

Meanwhile, data from Reuters and Kpler shows that Saudi exports have recovered to over 4 million barrels per day so far in September after dropping to 2.4 million in August, partly due to strikes on Saudi Aramco's East-West pipeline. JPMorgan cited satellite data showing Saudi crude moving through the Strait of Hormuz averaged 2.9 million barrels per day over the past six days, up from 700,000 in August.