Oil edges higher as markets eye U.S.-Iran talks, Saudi flows

Oil prices rose slightly in Asian markets on Tuesday after four days of declines, as traders kept an eye on the prospect of talks between the United States and Iran. Brent Oil Futures for November increased 0.6% to $100.89 per barrel, while WTI crude futures for October climbed 0.4% to $96.19 per barrel. However, Brent settled 3.4% lower on Monday, and October WTI fell 4.5%, marking their lowest closes since September 9.

U.S. President Donald Trump has expressed openness to meeting Iranian President Masoud Pezeshkian at the U.N. General Assembly in New York. Iran has outlined conditions for re-engaging in negotiations, which has generated optimism about potential diplomatic resolution of tensions. Supply issues have eased slightly as Saudi Arabia has reportedly increased oil shipments through the Strait of Hormuz following pipeline disruptions.

Saudi crude shipments through the Hormuz averaged around 2.9 million barrels per day over the past six days, a sharp rise from August levels, according to satellite data reported by Reuters. Despite this, the market remains exposed to potential disruptions. The Iran-aligned Houthis in Yemen continue to target Saudi assets, while Saudi Arabia faces constraints on some export routes.

In response, Britain has pledged limited military assistance to Saudi Arabia to counter Houthi attacks. Additionally, the Trump administration has unveiled a proposal for a $5 billion fund to aid Middle Eastern nations in rebuilding energy infrastructure damaged by the Iran conflict and reduce their reliance on the Strait of Hormuz.

Investors are also monitoring a scheduled meeting between U.S. President Trump and Chinese President Xi Jinping later in the week, which will discuss trade and geopolitical matters. China is the world's largest oil importer, making its economic outlook and trade relations a crucial factor in determining crude demand.