Oil prices slide to 11-day low on hopes of diplomacy in Iran war
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The attacks by the Houthis on Saudi Aramco’s East-West pipeline have prompted the state energy firm to increase exports through the Strait of Hormuz.
PHOTO: REUTERS
SINGAPORE – Oil prices slid towards the psychological threshold of US$100 a barrel and to their lowest in 11 days on Sept 21 as investors hoped for diplomatic progress on the Iran war due to this week’s UN meeting, and eyed a partial recovery in shipments from Saudi Arabia.
Brent crude futures and US West Texas Intermediate (WTI) crude touched their lowest since Sept 10 earlier on Sept 21. The Brent contract for November was at US$101.2 a barrel at 11.37am GMT, down US$2.66, or 2.6 per cent.
The WTI October contract that is expiring on Sept 22 fell US$2.50, or 2.5 per cent, to US$97.80 a barrel. The November contract stood at US$93.62.
Iran and the US exchanged new threats on Sept 20, although US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the United Nations General Assembly.
Iran has conveyed its conditions to mediators for re-engaging in negotiations aimed at ending the war with the US, Al Jazeera cited Iran’s security chief, Mohsen Rezaei, as saying in an interview on Sept 19.
However, tensions in the Middle East remained elevated as Yemen’s Iran-backed Houthis said they attacked “sensitive” sites in the Saudi capital of Riyadh on Sept 19 with missiles and drones, as well as an Aramco facility in the Red Sea city of Yanbu, a key oil export hub.
On Sept 21, a spokesman for the Revolutionary Guards, Hossein Mohebbi, said Iran would use new weapons and target locations not previously attacked if the US launched a new offensive against it, according to the Fars news agency.
China has asked Iran to help rein in the Houthis after an appeal to Beijing by Saudi Arabia following the attacks, according to three Iranian sources familiar with the matter.
The attacks by the Houthis on Saudi Aramco’s East-West pipeline have prompted the state energy firm to increase exports through the Strait of Hormuz in September and October after halting some shipments via Yanbu.
“Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia’s East-West pipeline,” JPMorgan analysts said in a Sept 18 note.
“The most notable pivot has come from Saudi Arabia,” said the analysts. Satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million bpd over the past six days, up from just 700,000 bpd in August. REUTERS