Oil Prices Rebound as Traders Weigh U.S.-Iran Talks, Saudi Supply

Oil prices edged higher in Asian trading, recovering from four consecutive sessions of losses as market focus shifted to potential diplomatic talks between the United States and Iran and signs of increased crude flows from Saudi Arabia.

Price Action

Global oil benchmarks posted modest gains after significant declines in the previous session. As of 21:15 ET (01:15 GMT), key futures contracts were trading higher:

• Brent crude futures for November delivery rose 0.6% to $100.89 per barrel.
• West Texas Intermediate (WTI) crude futures for October delivery gained 0.4% to $96.19 per barrel.

The recovery follows a sharp sell-off on Monday, where Brent settled 3.4% lower and WTI fell 4.5%, marking their lowest closing prices since September 9, according to Investing.com data.

Diplomatic and Supply Factors

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Investors are closely watching the United Nations General Assembly for a potential meeting between U.S. President Donald Trump and Iranian President Masoud Pezeshkian. Hopes for renewed diplomacy, which could de-escalate Middle East tensions and potentially ease sanctions on Iranian oil, have provided some support to the market.

Supply-side concerns have also eased after Saudi Arabia reportedly increased crude shipments through the Strait of Hormuz following disruptions to its East-West pipeline. Citing satellite data, Reuters reported that Saudi oil flows through the strategic waterway averaged approximately 2.9 million barrels per day over the past six days, a significant increase from August levels.

Lingering Geopolitical Risks

Despite the positive signals, the market remains sensitive to regional instability. Ongoing attacks on Saudi targets by Yemen's Iran-aligned Houthis underscore the persistent geopolitical risks. In response, Britain has agreed to provide limited military support to Saudi Arabia.

Meanwhile, the Wall Street Journal reported that the Trump administration has proposed a $5 billion fund to help Middle Eastern countries rebuild energy infrastructure and reduce their reliance on the Strait of Hormuz. Traders are also monitoring a planned meeting between the U.S. and Chinese presidents, as the trade relationship between the world's two largest economies is a key driver for global oil demand.