Oil prices fell in Asian trading on Monday, extending last week’s losses as investors focused on renewed diplomatic efforts to end the conflict between the United States and Iran and on signs that disrupted crude supplies from the Gulf could gradually recover.
Brent crude futures fell 1.25% to $102.57 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped 1.53% to $98.77 a barrel in early Asian trading. Both benchmarks ended the previous week lower as markets reassessed geopolitical risk premiums.
The decline followed reports that Washington and Tehran could resume high-level diplomatic contacts after months of military escalation. Investors have been closely watching signs of negotiations that could reduce the threat of further disruptions to energy exports from the Gulf region.
U.S. President Donald Trump said in an interview with Fox News that he would likely be willing to meet Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York. The comments fueled market expectations that diplomacy could help ease tensions between the two countries.
Despite the diplomatic signals, security risks in the Gulf remain elevated. Iran-backed Houthi militants launched missile and drone attacks targeting Riyadh over the weekend, prompting Saudi authorities to issue air raid warnings in the capital and heightening concerns about regional energy infrastructure.
Saudi Arabia is also continuing efforts to restore and reroute crude exports after attacks affected parts of its East-West Pipeline, which transports oil from the kingdom’s eastern fields to the Red Sea. The pipeline has become increasingly important as exporters seek alternatives to shipping through the Strait of Hormuz.
Reports that Saudi crude cargoes were being transferred ship-to-ship near Oman’s Sohar port for delivery to Asian refineries have helped ease immediate fears of supply shortages. Traders said the additional shipments suggested Saudi Arabia was working to maintain exports despite heightened regional tensions.
Market analysts say oil prices remain highly sensitive to developments in the US-Iran conflict. While hopes for diplomacy have reduced some of the geopolitical premium built into crude prices, investors continue to monitor military activity around the Gulf, shipping security in the Strait of Hormuz, and the outlook for global energy supplies.
