Oil Prices Plummet on Hopes for Reopened Strait of Hormuz
Oil prices dropped to a two-week low on Tuesday as hopes for increased Gulf supplies rose. Iran signaled it could reopen the Strait of Hormuz within seven days, and Saudi Arabia is set to resume exports from its Red Sea port of Yanbu.
The Brent crude futures November contract fell $2.11, or 2.1%, to $98.23 a barrel at 1151 GMT. The WTI October contract lost $2.48, or 2.59%, to $93.30 a barrel. The more actively traded November contract was down $2.36, or 2.55%, at $90.01 a barrel.
Iranian officials told Reuters that the Strait of Hormuz could be reopened within seven days if the US eases military pressure and lifts its blockade on Iranian ports. Hamad Hussain, senior climate and commodities economist at Capital Economics, said this was a sign that diplomacy efforts were working.
Saudi Arabia has restarted operations at its East-West Pipeline and could resume exports from Yanbu port later on Tuesday. The market is also focused on US President Donald Trump's meetings with world leaders at the UN General Assembly, against the backdrop of an unstable Middle East and Russia's 4-1/2-year-old war in Ukraine.