US-Iran Diplomacy Boosts Oil Prices to an 11-Day Low
Oil prices dropped to an 11-day low on Monday due to growing hopes for US-Iran diplomacy. Investors are watching this week's United Nations General Assembly in New York for any signs that the two sides could move toward talks.
The US-Iran conflict had added a risk premium to oil prices, but with diplomatic efforts underway, traders are removing some of that extra risk. Brent crude futures fell $2.12, or 2%, to $101.75 a barrel at 0859 GMT, while the October WTI contract dropped about 2%.
US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, according to Reuters. This comes as Iran's security chief Mohsen Rezaei told mediators what Tehran would require before re-engaging in talks.
JPMorgan analysts noted that Middle East oil flows have remained 'surprisingly strong' despite the damage to Saudi Arabia's East-West pipeline. The analysts made this assessment in a September 18 note, highlighting that Saudi Arabia has increased shipments through the Strait of Hormuz.