Oil prices slide about 2% as US, Iran explore path out of war
Brent futures fall US$2.28, or 2.1%, to settle at US$104.32 a barrel
Oil prices experienced a 2% decrease on Friday, September 25, as hopes for a US-Iran truce and potential US restrictions on diesel exports buoyed the market. Brent futures dropped $2.28, or 2.1%, settling at $104.32 a barrel, while West Texas Intermediate (WTI) crude fell $2.20, or 2.3%, to $92.41. Despite a weekly gain of less than 1% for Brent and an 8% decline for WTI, traders remain concerned over the threat of Houthi attacks disrupting supply from Saudi Arabia, a major Middle Eastern energy producer.
US and Iranian negotiators in New York are discussing a phased path out of war, with Iran refusing to budge on its nuclear program even if the US lifts its economic blockade, according to sources familiar with the talks. The possibility of a US diesel export ban is widening the gap between US crude oil futures and the global Brent benchmark, signaling expectations of reduced US refiner processing.
Additionally, Saudi Arabia, Turkey, and Pakistan are meeting to provide assistance to Saudi Arabia amid attacks by Iran-aligned Houthis. Crude oil flows through the Strait of Hormuz reached 33.7 million barrels in the week ending September 20, nearly matching pre-war levels, as the conflict between the US and Iran continues.
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