Oil retreats from highs as Saudi, Turkish, Pakistani officials visit Tehran
Brent crude fell to $114.85 a barrel and WTI to $100.87 as diplomatic visits to Iran raised hopes for de-escalation, pulling prices back from last week's multi-month peaks.
The declines mark a pullback from Friday’s levels, when Brent traded above $117 a barrel and WTI topped $103. Energy analyst Sugandha Sachdeva of SS WealthStreet attributed the move to profit-taking following the diplomatic push, noting it had “raised hopes of a potential breakthrough” between the US and Iran.
Officials from Saudi Arabia, Turkey and Pakistan travelled to Tehran to discuss ending hostilities in the region. Iran’s president, who received the delegations, called on Islamic nations to present a united front against threats, according to a post from the Iranian government. Unity may prove difficult given that several Gulf states remain US allies and have themselves been targeted by Iranian strikes this year.
The price relief was tempered by a CNN report indicating that US forces in the Middle East could strike Iran within 96 hours of an order from President Trump, who had signalled last week that he might favour military escalation over further talks. Continued Houthi attacks on Saudi energy facilities and Iranian strikes on tankers in the Strait of Hormuz also kept a floor under prices.
The International Energy Agency warned earlier this week that supply disruptions tied to the conflict are likely to persist into next year, suggesting the chances of an imminent peace deal remain slim.
Why it matters: Swings in the Iran conflict directly affect Brent crude and WTI crude through the risk of supply disruption in the Strait of Hormuz, a key chokepoint for global oil flows. Any escalation or de-escalation also tends to ripple into broader risk sentiment, influencing the US dollar and energy-sensitive equity sectors.
Sources: OilPrice.com; Investing.com (commodities); FXStreet