Crude oil prices took a dip today amid reports that there was willingness for peace in the Middle East on both sides of the conflict. The dip partially offset gains made earlier in the week, keeping oil benchmarks elevated.
At the time of writing, Brent crude was trading at $102.20 per barrel, and West Texas Intermediate was changing hands for $91.43 per barrel. Earlier in the week, Brent crude dropped below $100 per barrel on reports about Saudi Arabia restarting its East-West pipeline and higher oil flows via the Strait of Hormuz.
The UN General Assembly, however, gave traders a reality check, with President Trump threatening Iran with “annihilation” during his speech to world leaders. At the same time, Trump said peace talks were being “very productive”. Iran’s president, Masou Pezeshkian, in turn, said that Iran was open to negotiating peace but added that it would not respond well to force.
“The remarks made by the US president yesterday … are a sign of a bullying mentality. … The Iranian people will not bow to pressure,” Pezeshkian said in his own speech at the UN General Assembly, as quoted by Reuters.
Iran has set a number of conditions for the United States to fulfil in order for the Strait of Hormuz to reopen. The U.S. has not rejected these outright this time, but it has not signaled it was open to fulfilling them, either. The conditions include lifting the naval blockade on Iranian ports, an end to sanctions, and unfreezing Iranian assets.
The end of the war, therefore, remains distant, supporting oil prices despite the Saudi pipeline restart, as reflected in prices, which posted six consecutive daily losses over the last six days but reversed that for a 4% gain on Wednesday. Benchmarks still remain significantly higher than a month ago, and are up by 60% over the year to date, as noted by ING commodity strategists.
By Irina Slav for Oilprice.com
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