Oil prices climb ahead of potential US-Iran talks

Oil prices surged on Tuesday as investors awaited potential US-Iran talks at the United Nations General Assembly this week, following the emergence of additional supplies through the Strait of Hormuz over the weekend. Brent crude futures for November rose 1.29% to $101.63 a barrel, while WTI October climbed 0.96% to $96.70 a barrel.

The November contract saw an 80-cent increase, or 0.87%, to $93.17 a barrel. Tensions between Tehran and Washington intensified over the weekend, but US President Donald Trump expressed openness to meeting Iranian President Masoud Pezeshkian, who is set to attend the UN meeting in New York. Iran communicated its conditions for re-engaging in negotiations to mediators, according to Iranian security chief Mohsen Rezaei.

Middle East tensions persisted due to the attacks by Iran-backed Houthis on Saudi Arabia and the closure of a valve on Libya's Sharara crude pipeline, leading to a significant production decline. Saudi Aramco has increased exports through the Strait of Hormuz, but oil exports from the region remain below pre-conflict averages. The price outlook will depend on the volume of oil China purchases in the coming months and increased supply through the Strait of Hormuz, particularly refined products, as diesel prices soar to record highs in Europe and the United States due to reduced exports from major producers like Russia, Saudi Arabia, and the United Arab Emirates.