Oil Prices Rise on Qatari Mediation Hopes Amid Ongoing Disruptions

Oil prices ended Monday's trading session with modest gains, but tempered enthusiasm due to ongoing supply disruptions. Qatari mediators have pledged to facilitate talks between the US and Iran in an effort to find a peace deal that could reopen the Strait of Hormuz.

The news sent oil prices jumping over $4 per barrel in early trade after US President Donald Trump rejected a proposal from Iran. However, expectations that Qatari mediators would hold separate talks with Iranian Foreign Minister Abbas Araqchi and the US side later on Monday or Tuesday cooled investor enthusiasm.

Despite supply disruptions, crude oil exports from key Middle East producers rebounded in September to 12.8 million barrels per day, according to preliminary data from Kpler. This marks a significant increase compared to previous months.

The White House is considering regulatory relief that would allow broader sales of red-dyed diesel, in an effort to bring down soaring gasoline and diesel prices. US refiners are expected to process less crude oil if their diesel output gets stuck at home, which could widen the gap between US crude oil futures and the global Brent benchmark.