By 14:50 Moscow time, November Brent futures on ICE Futures were down $1.64, or 1.54%, to $104.96 per barrel. November WTI futures on NYMEX were falling by $2.1, or 2.22%, to $92.51 per barrel at the same time. The day before, Brent rose by 3.4%, and WTI by 2.7%.
Pressure on prices intensified after reports that the U.S. and Iran were considering a deal that could ensure the resumption of oil supplies through the Strait of Hormuz. The Washington Post, citing Iranian Foreign Minister Abbas Araghchi, wrote that Tehran had conveyed to U.S. officials a proposal that would make it possible to reopen the strait and resume talks on resolving the conflict within seven days. The newspaper also noted that the new proposal resembles a memorandum of understanding agreed by the sides in June.
An unnamed U.S. official told reporters that the U.S. is holding “positive and constructive talks through third-party mediation”. In the same report, SEB Research analyst Erik Meyersson noted that “at this stage neither Iran nor the U.S. is interested in intensifying military action” and that the next few days could become a turning point in the U.S.-Iran war.
The situation in the Middle East remains tense. Houthi representatives said they had used missiles and drones against targets in the territory of the Saudi capital Riyadh, as well as Saudi Aramco facilities in the port city of Yanbu al-Bahr on the Red Sea. Earlier, the Saudi-led Arab coalition fighting the Houthis said it had intercepted six ballistic missiles launched from Yemen toward Taif and Yanbu al-Bahr.
KCM Trade analyst Tim Water noted that hopes for a diplomatic settlement are helping the oil market weather the latest series of military strikes in the Middle East, and that oil, despite the attacks, is declining moderately. Kpler head of oil market analysis Homayoun Falakshahi believes the market’s reaction to each headline about “constructive talks” fades quickly. According to him, a sustained price decline is possible only with concrete steps such as unfreezing assets, lifting the blockade, or the actual resumption of supplies. According to preliminary Kpler data, the volume of oil supplies through the Strait of Hormuz for the week beginning September 20 reached 33.7 million barrels and was roughly in line with the previous week’s level.
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