Oil Prices Slide as Trump Signals Progress in Iran Talks

Oil prices fell on Wednesday after US President Donald Trump said American and Iranian representatives had held what he described as “very good” and productive discussions at the United Nations.

Brent crude, the international benchmark, declined 0.9 per cent to $98.41 per barrel, while US West Texas Intermediate crude fell 1.4 per cent to $89.23 per barrel during Asian trading.

Both benchmarks remained below the $100 mark, which has been repeatedly crossed since the outbreak of the Middle East conflict in February.

Trump said the three-hour meeting between US and Iranian officials had been productive and that another round of discussions was expected to take place soon.

His comments came shortly after he delivered a strongly worded address at the United Nations, where he said he faced a major decision on whether to reach an agreement with Iran or take military action against the Islamic Republic.

The United States and Iran have remained at odds nearly seven months after US and Israeli strikes triggered the conflict.

Iran has maintained restrictions around the Strait of Hormuz, while the US has imposed a counter-blockade on Iranian ports.

The wider regional conflict has also affected energy supplies, with fighting involving Iran-backed Houthi forces in Yemen contributing to pressure on oil exports through the Red Sea.

Stephen Innes of Quintex Intel said the US-Iran meeting was significant for oil markets because it suggested a shift from expectations of further escalation towards a possible diplomatic process, although a final agreement remained uncertain.

Trump has previously said oil prices would fall once the United States achieves its objectives in the conflict.

Meanwhile, Saudi Arabia, the world’s largest crude oil exporter, has reportedly restarted operations along its East-West Pipeline, an important export route that had been shut following drone attacks.

The kingdom is reportedly targeting a resumption of exports later this week.

Bloomberg also reported that Saudi oil giant Aramco had informed some Asian refiners that crude could soon be collected from the Red Sea port of Yanbu, while European customers were reportedly told that they would not receive oil allocations for October.

The movement in oil prices came as global financial markets reacted to developments in the Middle East, while investors also monitored US-China relations ahead of a planned meeting between Trump and Chinese President Xi Jinping.

The talks between the two leaders are expected to focus partly on trade, as Washington and Beijing continue efforts to reach a longer-term agreement following an extended period of tariff tensions.

Market analysts said developments surrounding the Middle East conflict could have a greater impact on financial markets, particularly if Washington seeks China’s influence in efforts to encourage Iran to reach an agreement.

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