Oil eases on Middle East diplomacy hopes, Saudi attacks keep supply worries alive

Oil prices slipped slightly on Tuesday, falling around 1% as hopes for a resolution to the US-Israeli conflict with Iran kept supply concerns at bay, according to Reuters. The dip came despite renewed Houthi attacks on Saudi Arabia. Brent crude futures dropped $1, or 0.86%, to $114.81 a barrel, while US West Texas Intermediate crude fell 88 cents, or 0.86%, to $100.88.

The decline in prices was part of a profit-taking trend after crude surged to multi-month highs due to the prospects of improved relations between the US and Iran. Saudi Arabia, Turkey, and Pakistan held talks with Iranian officials in Tehran on Monday in an attempt to ease tensions in the Middle East. However, the fragile peace outlook was threatened by the recent Houthi strikes on Saudi Arabia, a key oil producer.

The Strait of Hormuz, vital to global energy supplies, has been plagued by increased attacks from Iran-aligned forces, with October witnessing the worst month for such incidents in recent years. This geopolitical turmoil has caused stress across various aspects of the oil market, including supply, logistics, inventories, and refining.