Oil Prices Ease on Hopes for U.S.-Iran Talks Despite Fresh Houthi Attacks

Oil prices retreated in Asian trading on Monday, extending last week's losses, as the market focused on potential diplomatic overtures between the U.S. and Iran. The move comes even as fresh attacks in the Middle East underscore persistent threats to regional energy infrastructure.

As of 20:33 ET (00:33 GMT), Brent crude futures for November delivery fell 0.9% to $102.93 per barrel, while West Texas Intermediate (WTI) crude futures declined 1% to $99.27 per barrel, according to data from Investing.com.

Diplomatic Hopes Weigh on Prices

The primary driver for the price decline is the prospect of a potential meeting between U.S. President Donald Trump and Iranian President Masoud Pezeshkian. In a Fox News interview, President Trump indicated he would likely be open to meeting on the sidelines of the United Nations General Assembly this week.

Investors are watching for any signs of de-escalation, as progress in negotiations could reduce the geopolitical risk premium that has been supporting crude prices. The market action follows a week where Brent already posted losses on signs of diplomatic progress and efforts to restore previously disrupted Saudi supplies.

Regional Tensions Persist

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Despite the diplomatic optimism, ongoing conflict continues to threaten supply stability. On Saturday, Iran-backed Houthi rebels in Yemen launched missile and drone strikes toward Riyadh, prompting air-raid alerts in the Saudi capital.

These attacks highlight the continued risks to energy infrastructure and key shipping routes. They also raise concerns about further disruptions to oil exports from Saudi Arabia, whose East-West pipeline has already been affected by previous attacks.

Conflicting Signals for the Market

Oil markets are currently navigating these conflicting signals. While the possibility of U.S.-Iran talks is easing supply fears, the reality of Houthi attacks serves as a stark reminder of regional volatility.

To mitigate immediate shortages, Saudi Arabia has reportedly offered additional crude cargoes to Asian refiners through ship-to-ship transfers, according to earlier reports. This leaves the market highly sensitive to further developments on both the diplomatic and military fronts.