Oil Prices Plummet on Diplomatic Progress Between US and Iran
Oil prices continued their downward trend on Wednesday, pressured by diplomatic progress between the US and Iran. The conflict in the Middle East has disrupted oil flows through the Strait of Hormuz, a key waterway that carries one-fifth of global oil supplies.
US President Donald Trump's comments on Tuesday added to market optimism. He stated that he could 'annihilate' Iran but also noted that US officials had held a productive meeting with Iranian representatives in New York.
The meeting marked the first direct contact between US and Iranian officials since June, according to Trump. The negotiations aim to ease military pressure on Iran and potentially reopen the Strait of Hormuz, which has been closed due to tanker attacks and blockades.
Meanwhile, Saudi Arabia has restarted operations at its East-West pipeline, which can bypass the Strait of Hormuz. However, repairs to damaged pumping stations may take six to eight weeks to complete, limiting the pipeline's capacity to 7 million barrels per day.