Key Takeaways
- Brent crude futures fell 0.86% to $114.81 a barrel.
- Saudi Arabia, Turkiye and Pakistan held talks with Iranian officials in Tehran.
- Geopolitical uncertainties keep prices elevated amid ongoing tensions.
Oil prices edged lower on Tuesday, dropping about 1% as prospects for a resolution of the US-Israeli war on Iran kept supply fears at bay. Brent crude futures fell $1, or 0.86%, to $114.81 a barrel by 0418 GMT, while US West Texas Intermediate crude was down 88 cents, or 0.86%, at $100.88.
Despite renewed attacks by the Houthi group on Saudi Arabia, talks between Saudi Arabia, Turkiye, Pakistan and Iran in Tehran on Monday aimed at easing tension in the Middle East. Iranian state media reported that the four countries agreed to continue talks with a view to strengthening cooperation in peace and security.
Crude oil prices are witnessing profit-taking after surging to multi-month highs, as renewed diplomatic efforts in West Asia have raised hopes of a potential breakthrough in negotiations between the US and Iran, according to Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
Last week, Brent prices surged to more than $117 a barrel, the highest since April, after a wave of Iranian attacks on tankers around the Strait of Hormuz. Brent prices touched $117 on Monday as well.
The war rippling across the Middle East has placed the Strait of Hormuz at the center of the turmoil. The narrow waterway carried around a fifth of the world’s energy supplies before the conflict erupted in February. The oil market is vulnerable, with stress across areas such as supply, logistics, inventories and refining, according to ANZ Research.
Gulf crude exports fell for a fourth straight week and flows through the Strait of Hormuz were just about 60% of their normal level, while global distillate inventories held nearly 5% below their five-year average, the research firm added.
October has been the worst month for attacks on commercial shipping in the Strait of Hormuz and nearby waterways, data from a Washington-based think tank shows, among worldwide maritime security incidents it has tracked since 2017.
The ongoing geopolitical uncertainties and the potential for peace remain fragile, with renewed attacks by the Houthi group on key producer Saudi Arabia.
Crude oil prices are witnessing profit-taking after surging to multi-month highs, as renewed diplomatic efforts in West Asia have raised hopes of a potential breakthrough in negotiations between the US and Iran.
Sugandha Sachdeva, Founder of SS WealthStreet
