Oil prices fall 1% as Iran diplomacy eases supply fears

Brent slips to $114.81 and WTI to $100.88 as Pakistan, Saudi Arabia and Turkey pursue diplomacy with Iran, although Houthi attacks and disruptions in the Strait of Hormuz keep markets on edge NEW DELHI: Global oil prices declined by nearly 1% on Tuesday as renewed diplomatic efforts involving Iran raised hopes of easing the Middle East conflict, although fresh Houthi attacks on Saudi Arabia and continued disruptions in the Strait of Hormuz kept supply concerns alive. Brent crude futures fell $1, or 0.86%, to $114.81 per barrel by 0418 GMT, while US West Texas Intermediate (WTI) crude declined 88 cents, or 0.86%, to $100.88 per barrel. Both benchmarks had fallen around 1% earlier in the session. The decline followed talks in Tehran on Monday involving officials from Pakistan, Saudi Arabia, Turkey and Iran, aimed at reducing regional tensions amid the ongoing US-Israeli war on Iran. According to Iranian state media, the four countries agreed to continue discussions to strengthen cooperation on regional peace and security. The diplomatic engagement offered some relief to oil markets after prices climbed to multi-month highs last week following attacks on commercial tankers near the Strait of Hormuz. Brent crude had surged above $117 per barrel last week, its highest level since April, and briefly returned to $117 on Monday. Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, attributed the latest decline partly to profit-taking after the recent rally, with renewed diplomatic efforts raising expectations of a possible breakthrough in negotiations between the United States and Iran. However, she cautioned that persistent geopolitical uncertainty continued to keep oil prices elevated. Prospects for de-escalation remained uncertain following renewed attacks by Iran-aligned Houthi forces on Saudi Arabia, a major global oil producer. Meanwhile, commercial shipping in and around the Strait of Hormuz continued to face significant security threats. Data from a Washington-based think tank showed that October recorded the highest number of attacks on commercial vessels in the area among the maritime security incidents it has tracked since 2017. The strategic waterway, which carried approximately one-fifth of global energy supplies before the conflict began in February, has experienced severe disruptions as the war spread across the Middle East. According to ANZ Research, Gulf crude exports declined for a fourth consecutive week, while oil flows through the Strait of Hormuz remained at approximately 60% of normal levels. The research firm also highlighted pressures across global oil supply chains, including shipping logistics, inventories and refining operations. Global distillate inventories, which include fuels such as diesel and heating oil, were nearly 5% below their five-year average, adding to concerns over supply availability. Despite Tuesday's decline, oil prices remained close to recent highs as traders weighed the possibility of diplomatic progress against continuing attacks on regional energy infrastructure and shipping routes.