US-Iran Truce Hopes Counter Saudi Supply Risks, Oil Prices Ease

Oil prices declined by about 1% on Friday as markets weighed the possibility of a truce between the US and Iran against concerns over increasing attacks against Saudi Arabia.

The price drop came as US and Iranian negotiators in New York explored a phased path out of war, which would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade on Iran.

Despite this diplomatic development, Saudi, Turkish, and Pakistani military chiefs were set to discuss help for Saudi Arabia, which has been facing attacks by Yemen's Houthis.

Crude oil flows out of the Strait of Hormuz reached 33.7 million barrels so far in the week starting September 20, according to preliminary ship-tracking data from Kpler.