Oil Prices Rise as Markets Await US-Iran Diplomacy at UN

Oil prices rose on Tuesday after four consecutive sessions of losses as investors awaited developments in possible US-Iran diplomacy during the United Nations General Assembly in New York.

Brent crude futures for November gained $1.72, or 1.7%, to $102.06 a barrel at 9:17 a.m. Saudi time, while October West Texas Intermediate futures, due to expire on Tuesday, rose $1.62, or 1.7%, to $97.40 a barrel. The more actively traded November WTI contract gained $1.28, or 1.4%, to $93.65.

The early gains came as traders assessed the possibility of diplomatic contacts between Washington and Tehran. US President Donald Trump has said he is open to meeting Iranian President Masoud Pezeshkian, who is attending the UN General Assembly.

However, market analysts said the rise appeared to reflect short-covering after recent declines rather than a major change in the oil supply outlook.

“The move higher in WTI and the stronger open in Brent have the appearance of a typical short-covering bounce after the recent decline, rather than a fundamental shift,” said Tim Waterer, chief market analyst at KCM Trade.

He said traders who had positioned for further declines were reducing some of those positions while waiting for developments in diplomatic efforts.

Iran has also communicated conditions for a possible return to negotiations through mediators, according to reports. The latest developments have kept oil markets highly sensitive to statements from Washington and Tehran.

Supply concerns have eased in recent days as more crude has moved through the Strait of Hormuz. Saudi Arabia loaded about 14 million barrels of crude onto seven supertankers at Gulf terminals on Sunday, according to tanker-tracking data. Reuters reported that flows through the strait had risen to about 2.9 million barrels per day, compared with around 700,000 bpd in August.

Saudi Arabia has also restarted its East-West oil pipeline, which was shut after drone attacks disrupted shipments through the Red Sea port of Yanbu. The pipeline is designed to reroute about 4 million bpd to the Red Sea, although it was initially operating at a reduced rate following its restart.

Iran said on Tuesday that it could reopen the Strait of Hormuz within seven days if the United States eases military pressure and lifts its blockade of Iranian ports. The Iranian delegation at the UN has been given authority to pursue diplomatic discussions.

Regional tensions remain a major risk for energy markets, while traders are also monitoring disruptions in Libya, where an armed group reportedly closed a valve on the Sharara crude pipeline, reducing production at the country’s largest oilfield.

With supply conditions changing rapidly and diplomatic efforts still uncertain, analysts expect oil prices to remain sensitive to developments around the Middle East and the Strait of Hormuz.