(Bloomberg) — Oil extended losses as the US flagged progress in talks with Iran to end their war, and Saudi Arabia moved to restart a key pipeline.
West Texas Intermediate for November fell below $90 a barrel after losing about 10% over the previous five days, while Brent settled near $99 on Tuesday. President Donald Trump said officials had a “very productive” meeting with Iranian envoys, even after he threatened to annihilate the Islamic Republic during a United Nations speech. More meetings are planned, he added.
In the Middle East, Saudi Arabia aims to restore oil exports via its critical East-West pipeline in the coming days, enabling Riyadh to resume a bypass of the Strait of Hormuz. The conduit — which has the capacity to transport 7 million barrels a day — was damaged in attacks earlier this month.
Oil has still rallied by more than 60% this year as Middle East hostilities disrupted shipments through Hormuz, the world’s most critical energy chokepoint. The surge has boosted inflation, with product prices rallying even more than crude. Amid the fuels crunch, President Trump said he had encouraged his advisers to support a ban on US diesel exports.
Trump said his special envoys Steve Witkoff and Jared Kushner had participated in the meeting with the Iranian envoys. The US leader was also due to meet with officials from the Persian Gulf, including members of the six-nation Gulf Cooperation Council, as well as Syria, Iraq, Jordan and Turkey.
Multiple efforts to end the war between Washington and Tehran have so far proved fruitless, including an interim peace deal that was in effect for a short period. Since then, the US has been blockading the Islamic Republic’s ports, limiting energy export revenues. In retaliation, Iran has been attacking ships in Hormuz, the waterway that links the Persian Gulf to global markets.
After more than six months of conflict, the two sides remain at odds on a host of key issues, including Hormuz. Tehran has asserted its control over the chokepoint, while Washington insists its status remains unchanged.
Traders also parsed a mixed report on US stockpile moves from the American Petroleum Institute, which showed a 1.8-million-barrel build in nationwide crude holdings, but declines in inventories of gasoline and distillates. Official figures are due later Wednesday.
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