Oil Prices Rebound as Diplomatic Efforts Balance Supply Risks

Oil prices rose on Tuesday as traders weighed supply risks in the Middle East against diplomatic efforts to end the US-Iran war. The price of Brent crude gained 1.4% to reach $101.74 per barrel, while WTI oil rose 1.1% to $96.85.

The increase comes after a four-day drop of nearly 8%, with traders now focusing on potential supply disruptions and diplomatic efforts. President Donald Trump is set to address the United Nations General Assembly in New York later on Tuesday, where he may meet with his Iranian counterpart, Masoud Pezeshkian.

However, Hamad Hussain, a senior climate and commodities economist at Capital Economics Ltd, noted that it's unclear if talks will lead to tangible progress given the distance between US and Iran demands. Supply risks in the Middle East remain acute, with a tanker reportedly struck in the Strait of Hormuz on Monday.

In Libya, output at the country's largest oil field has slumped by more than half due to an armed group shutting a key pipeline. The Sharara field is currently pumping about 127,000 barrels per day.