Oil prices fall as Iran says it is open to diplomacy to end the war
Brent crude futures fell 0.9 per cent to US$102.16 a barrel as of mid-day on Sept 24.
Oil prices fell on September 24 after surging 4% the previous day, as Iran indicated it was still open to diplomacy to end the US-Iran war, despite significant differences between the two nations. Brent crude futures dropped 92 cents, or 0.9%, to $102.16 a barrel, while West Texas Intermediate (WTI) futures declined 77 cents, or 0.8%, to $91.39.
Iran and the US remain at odds on how to bring the war to an end, but Iran's senior official stated that diplomacy must persist following President Hassan Rouhani's assurance at the UN General Assembly that Tehran would not give in to US pressure. Tehran is currently evaluating Washington's response to its peace proposals, which focus on lifting the US naval blockade on Iranian ports and reopening the Strait of Hormuz.
Priyanka Sachdeva, head of market insights at Phillip Nova, explained that oil prices are falling due to the market unwinding some of its geopolitical risk premium, as Gulf supply improves and hopes of a US-Iran diplomatic breakthrough increase. Brent continues to carry a larger geopolitical and sea-route premium since international crude is more directly impacted by Middle East and Hormuz disruptions, whereas WTI benefits more from relatively insulated US supply.
Earlier on September 23, Iran's security chief, Mohsen Rezaei, stated that the Strait of Hormuz would not reopen until Iran's conditions were met. US Secretary of State Marco Rubio told reporters that a deal with Iran would require hard work over time, and President Donald Trump also mentioned military options. Traders also considered potential restrictions on diesel exports, with ultra-low-sulfur diesel futures down about 5% in midday trading following reports that the Trump administration was preparing plans for a 90-day diesel ban.
The White House, however, denied these allegations. Energy Secretary Chris Wright had previously stated that a diesel export ban would not help alleviate high energy prices and might worsen global supplies, further disrupting economies. Analysts and market observers have warned that such a measure would be ineffective in addressing energy price concerns and could exacerbate global supply issues, thereby causing additional disruptions to economies.
US distillate inventories, comprising diesel and heating oil, decreased by 428,000 barrels to 107.4 million barrels last week, according to Energy Information Administration data. In contrast, US crude inventories increased by 3 million barrels to 426.4 million barrels last week, although analysts polled by Reuters had anticipated a 641,000-barrel draw.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
