Oil futures declined to their lowest levels in 11 days during trading on Monday, with both major benchmarks dropping approximately 2% as market participants reassessed geopolitical risks and supply dynamics in the Middle East.
November Brent crude futures fell $2.12 per barrel to $101.75, while the October WTI contract declined $1.96 to $98.34 a barrel, with the November contract trading at $94.16. The selloff reflected reduced expectations of an immediate escalation in tensions between the United States and Iran, with analysts noting that a risk premium was being removed from prices amid diplomatic signals. US President Donald Trump indicated willingness to meet with Iranian President Masoud Pezeshkian during the week’s United Nations General Assembly gathering in New York, though both nations continued exchanging threats over the weekend.
Supply considerations also weighed on prices as Saudi Arabian crude shipments showed signs of recovery despite ongoing regional disruptions. Attacks by Yemen’s Houthis on Saudi facilities, including an Aramco export center in Yanbu on the Red Sea, had damaged the East-West pipeline and created export bottlenecks. In response, Saudi Arabia redirected shipments through the Strait of Hormuz, significantly increasing volumes during the period. JPMorgan analysts noted that Saudi crude flows through the Hormuz averaged 2.9 million barrels per day over the preceding six days, compared with approximately 700,000 barrels per day in August, demonstrating “surprising” resilience in regional export capacity.
Despite the modest supply recovery and diplomatic developments offering some relief to prices, underlying tensions persisted. Iran’s Revolutionary Guards warned of deploying new weapons and striking previously untargeted locations should the United States launch another military operation, and reports indicated China had been asked to help restrain the Houthis following requests from Saudi Arabia. These factors continued to create uncertainty around medium-term stability and energy infrastructure security.
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