Oil prices declined to their lowest levels in more than a week on Monday 21 September, as market participants looked to the upcoming United Nations General Assembly (UNGA) for potential diplomatic progress related to the Iran war.
At 08:59 GMT, November Brent crude futures had dropped by $2.12, or 2%, to $101.75 per barrel (bbl), reported Reuters.
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Meanwhile, US West Texas Intermediate’s (WTI) October contract decreased by $1.96, or 2%, to $98.34/bbl. The November contract is priced at $94.16.
The drop in prices came as investors responded to hopes that the UN meeting in New York could open channels for negotiation between Iran and the US.
Despite new threats traded by both nations over the weekend, US President Donald Trump indicated willingness to meet Iran’s President Masoud Pezeshkian during the assembly.
Over the weekend, Yemen’s Houthis reported strikes on sensitive locations in Riyadh, including an Aramco facility in Yanbu, a significant Saudi oil export port.
Iran’s Revolutionary Guards, via spokesman Hossein Mohebbi, said new weaponry would be used and new targets struck in response to any US offensive.
Meanwhile, China approached Iran for assistance in restraining the Houthis, following an appeal from Saudi Arabia, according to Iranian sources.
The recent attacks on Aramco’s East-West pipeline led to increased Saudi oil exports through the Strait of Hormuz after disruptions at Yanbu.
On Friday, Bloomberg News reported that Aramco had informed at least two European customers it would not supply crude oil next month, said Reuters.
Some European refiners, such as Poland’s Orlen, sought alternatives by purchasing North Sea crude.
Separately, Aramco has increased Gulf shipments via ship-to-ship transfers off Oman’s Sohar port to offset lost Red Sea volumes.
Meanwhile, tensions escalated in Russia as Ukraine launched what authorities described as the largest drone attack on Moscow’s region to date, reported Reuters.
The incident killed three people and damaged part of a refinery in the Russian capital.
Moscow Mayor Sergei Sobyanin reported that more than 1,600 drones had been downed since Saturday, with 450 targeting Moscow.
Continued Ukrainian strikes have affected a significant portion of Russia’s oil refining capacity, resulting in shortages, price rises and queues at filling stations across several regions.
The Moscow refinery processed 11.6 million tonnes (mt) of oil in 2024, producing 2.9mt of petrol and 3.2mt of diesel, according to the latest data.
Elsewhere, QatarEnergy CEP Saad al-Kaabi said the crisis in the Strait of Hormuz could delay some expansion projects, as key equipment was unable to reach the country, reported Reuters.
Several liquefied natural gas projects are scheduled to begin operations between 2027 and 2028.
