Trump: Gulf states back continued maritime blockade on Iran

Brent crude futures slipped more than US$7 a barrel following settlement on Monday, reaching their lowest since late August, as US President Donald Trump signaled a lack of urgency in launching fresh strikes against Iran. The futures settled down US$5.75, or 5.85 percent, to US$92.57 a barrel. Prices continued to decline after settlement, falling over US$7 a barrel.

West Texas Intermediate futures also dropped, settling down US$3.98, or 4.38 percent, to US$86.85. Brent crude prices plummeted by 16 percent last week, marking the steepest weekly decline since the Covid-19 pandemic began. On Sunday, Trump expressed low chances of ordering additional attacks on Iran as long as talks to end the conflict progressed.

Despite this, both countries reported shipping disruptions in or near the Strait of Hormuz. Analysts noted that sellers were encouraged by the prospects of peace, even though the fighting continued unabated. Last week, Trump had hinted at a potential resumption of attacks on Iran, while Teheran vowed retaliation by targeting US and Israeli assets.

Iran has indicated it would not negotiate unless Washington met seven preconditions outlined in a June interim agreement. Saudi Arabia and Oman urged the need to continue diplomatic efforts to resolve the regional crisis and protect maritime security, while Trump was set to meet the Qatari prime minister, a mediator, though Gulf officials doubted an imminent deal.

Iraq has reached arrangements with the US to allow Iraqi oil exports through the Strait of Hormuz via a shipping lane near Oman. A fire extinguished at a Saudi pipeline struck by the Saudi-led coalition fighting Yemen's Iran-aligned Houthis, causing no casualties or damage. The Saudi-led coalition also destroyed a factory producing ballistic missile components and a chemical plant for missile fuel.

An attack on Saudi Aramco's corporate office in Riyadh saw debris damage windows across several floors. Russia and Ukraine are reportedly entering US-mediated talks to end Moscow's war on Ukraine, with signs of flexibility from both sides. US crude oil and product inventories are expected to have declined last week, as the global oil market shows signs of excess supply due to high prices and reduced demand.