Diplomacy Expectations Between the US and Iran Push Oil Prices Down
Expectations of diplomatic contacts between Washington and Tehran ahead of the UN General Assembly in New York caused oil prices to drop below 100 dollars in global markets.
As expectations strengthened that the tension between the US and Iran could be resolved through diplomatic channels, and with developments ahead of the United Nations General Assembly in New York, oil prices fell below 100 dollars.
Decline in Brent Oil Prices
The futures price of a barrel of Brent oil, which rose up to 105 dollars yesterday, completed the day at 103.87 dollars. Today, the November futures price decreased by approximately 4 percent compared to the previous close, falling to 99.75 dollars.
West Texas Intermediate Crude
With this decline in global markets, the November futures price of a barrel of West Texas Intermediate crude began trading at 92.14 dollars at the same moments.
Diplomatic Contacts and Statements from Leaders
Expectations that the contacts to be held within the scope of the UN General Assembly could reduce geopolitical tension in the Middle East and that negotiations might restart are influential in the drop in oil prices.
US President Donald Trump's statement that he is open to meeting with Iranian President Masoud Pezeshkian within the scope of the UN General Assembly strengthened expectations that conflicts between the parties could ease.
Supply Concerns and Geopolitical Risk Premium
Expectations that tensions might decrease alleviate supply concerns regarding oil shipments in the region, primarily the Strait of Hormuz, while also contributing to a reduction in the geopolitical risk premium on prices.
UN General Assembly and Qatar's Role
Described as one of the world's most important diplomatic gatherings and bringing together numerous countries, the 81st session of the United Nations General Assembly will start on September 22 in New York.
Qatari Foreign Ministry Spokesperson Majed al-Ansari stated that work has been underway on different ideas for about two weeks to resume talks between Washington and Tehran.
Saudi Arabia's Exports and Fed Policies
After Saudi Arabia's crude oil exports dropped to 2.4 million barrels per day in August, they rose above 4 million barrels per day in September.
In addition, the US Federal Reserve's interest rate hike expectations and policies continue to be among the elements creating pressure on oil prices.