Oil prices slide on hopes diplomacy at UN will help end Iran conflict

Oil prices took a downward turn on Monday, sliding to their lowest level in a week. This was due to optimism surrounding the potential for diplomatic progress during the UN General Assembly in New York this week. Brent crude fell by 2.12 percent to $101.67 per barrel, while West Texas Intermediate crude dropped by 2.24 percent to $98.05 per barrel.

Analyst Tim Waterer from KCM Trade suggested that a degree of risk premium was being removed from oil prices as hope grew that a diplomatic path to de-escalate the US-Iran conflict might emerge this week. However, the validity of this hope remains uncertain.

On Sunday, US President Donald Trump revealed he was contemplating three options to end the war with Iran: "Wiping Iran out", allowing it "to rot economically", or reaching a deal. Trump, who had received a list of demands from Tehran, indicated his willingness to meet Iranian President Masoud Pezeshkian, who is set to attend the UN General Assembly in New York starting from Tuesday.

The exact readiness of Tehran for a US-Iran presidential meeting during the UNGA is unclear. In addition to the ongoing US-Arab diplomacy, the US President is also scheduled to meet with Gulf officials during his New York visit. These meetings, which include representatives from Iraq, Jordan, and Egypt, are expected to address various issues, with a particular focus on Iran and its regional proxies, as well as the future trajectory of the conflict with the US.