The price of Brent crude oil decreased to $101.99 per barrel in Asian trading on Monday, representing a 1.8% decline. This price drop comes as investors pay attention to diplomatic efforts aimed at ending the existing tensions between the U.S. and Iran. Meanwhile, new attacks by Iranian-backed Houthis have kept tensions elevated.
Increased Concerns Over Houthi Attacks
At 03:02 Eastern Time, West Texas Intermediate (WTI) crude oil trading also saw a 2.1% decline, reaching $98.24 per barrel. Brent oil prices faced a weekly decline on Friday as well, but signs of diplomatic progress and efforts to restore Saudi oil supply had alleviated some market concerns.
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Diplomatic Impacts on Oil Market
The U.S. government, led by Donald Trump, has announced that it may meet with Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York. Any progress in negotiations could reduce geopolitical pressures in the oil market. However, recent Houthi attacks, which included missile and drone strikes on Riyadh, have posed risks to energy infrastructure and transportation routes in the region.
These attacks prompted Saudi Arabia to issue airstrike warnings for the capital. Additionally, with rising tensions regarding U.S.-Iran relations, concerns have arisen about further disruptions to Saudi oil exports.
The East-to-West pipeline in Saudi Arabia, which transports crude oil from the eastern fields of the country to the Red Sea, remains affected despite recent attacks. Although Riyadh is seeking alternative ways to transport oil to international markets. Recent reports indicate that Saudi Arabia is offering additional oil shipments to Asian refineries via maritime transport near the Port of Sohar in Oman, which has alleviated immediate concerns about oil shortages.
These conflicting signals make the oil market highly sensitive to diplomatic and military developments.
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