The market expects diplomacy between the US and Iran to ease and Saudi exports will partially resume, and international oil prices will fall to a low of more than a week
The Zhitong Finance App learned that on Monday, international oil prices fell to their lowest level in more than a week. The market expects progress in US-Iran diplomacy during this week's UN meeting. Meanwhile, investors are concerned about a partial recovery in Saudi oil exports, despite ongoing Houthi attacks. Brent crude oil futures and WTI crude oil futures both hit their lowest level since September 10 in early trading on Monday. As of press time, Brent crude oil fell 2.19% to $101.60 a barrel; WTI crude oil fell 2.20% to $93.97 a barrel.
Tim Whatley, chief market analyst at KCM Trade, said: “The market is hopeful that a diplomatic path may emerge this week to cool down the US-Iran war, so part of the risk premium in oil prices is being removed.” “Whether this hope holds true is another question. Time will tell.”
A Singaporean brokerage firm said that WTI crude oil fell below the critical psychological support level of $100 per barrel, while some investors may extend their positions until the November contract the day before the October contract expires.
Diplomatic hopes and threats coexist
Iran and the US issued new threats to each other on Sunday, and the impasse continues. According to reports, US President Trump said in an interview on September 20 (Sunday) that the US is in the “decision-making stage” on the Iran issue and that “very important things” will happen “soon” in the future. Trump said that the options currently on the table include “completely destroying Iran,” let Iran's economy continue to deteriorate, or reach an agreement. However, Trump also said that he is willing to meet with Iranian President Masood Pezzahizyan. Pezechizyan is expected to attend the UN General Assembly in New York this week.
According to reports, Iran's security chief Mohsin Rezai said in an interview on Saturday that Iran has conveyed an official list of conditions aimed at ending the war to the US through the mediator Qatar. Qatar's Foreign Ministry spokesman Majed Ansari said on Sunday that Qatar is maintaining communication with the US and Iran to push for the resumption of negotiations between the US and Iran.
However, the situation in the Middle East remains highly tense. Iran-backed Houthis in Yemen said they attacked “sensitive” locations in the Saudi capital Riyadh with missiles and drones last Saturday, as well as a Saudi Aramco facility in the Red Sea city of Yanbu. Yanbu is a key oil export hub.
Saudi oil exports partially resume
The Houthis attack on Saudi Aramco's east-west pipeline prompted the state-owned energy company to increase exports through the Strait of Hormuz this month and next, after the company suspended some shipments through Yanbu.
According to preliminary data from analyst firm Kpler, this has allowed OPEC leader Saudi exports to recover to more than 4 million b/d so far in September, while in August they plummeted to 2.4 million b/d, the lowest level since at least 2013.
“Despite disruptions to Saudi Arabia's east-west pipeline, Middle East oil flows are unexpectedly strong,” analysts at J.P. Morgan Chase said in a report on September 18. They added that the average total oil flow over the past 10 days was 17.1 million b/d, which is only 6.1 million b/d lower than the 2025 average.
“The most notable transformation came from Saudi Arabia,” the analyst said. According to satellite data, the average of Saudi oil passing through the Strait of Hormuz in the past six days was 2.9 million b/d, compared to only 700,000 b/d in August.
Daniel Takitin, co-founder and CEO of Sky Links Capital Group, anticipates that oil prices will likely remain closely linked to the pace of export normalization and progress in diplomacy. Takitin added: “Any setback or further deterioration in shipping conditions will tighten the physical market and resume upward pressure on prices.”