Oil Prices Ease as Iran Tensions Clash With Diplomacy Hopes

Oil prices fell during Asian trading on Thursday, giving back some of the previous session’s gains as investors assessed escalating U.S.-Iran tensions alongside signs that diplomatic efforts could still ease the conflict.

Brent crude futures for November delivery dropped 1% to $102.10 a barrel as of 00:32 GMT, while West Texas Intermediate (WTI) crude futures declined 0.7% to $91.50. Brent had surged nearly 4% on Wednesday, while WTI gained almost 2%.

The pullback followed Iranian President Masoud Pezeshkian’s speech at the United Nations General Assembly. Pezeshkian said Tehran would not surrender to U.S. pressure but remained willing to pursue diplomacy.

His remarks came after U.S. President Donald Trump warned that Iran could face severe military consequences if an agreement to end the conflict was not reached.

A senior Iranian official said Tehran was reviewing Washington’s response to an Iranian proposal aimed at ending hostilities, although substantial differences remained. Indirect negotiations have included discussions over reopening the Strait of Hormuz and potentially lifting the U.S. naval blockade on Iran.

The Strait of Hormuz remains critical for global energy markets because roughly one-fifth of worldwide oil and gas shipments normally pass through the waterway. Iranian security chief Mohsen Rezaei said Wednesday that the strait would remain closed until Tehran’s conditions were satisfied.

Meanwhile, improving Middle East oil supplies have capped crude price gains. Saudi Arabia has restarted its East-West pipeline to the Red Sea, while Iraq has increased exports and expects additional shipments through Turkey.

U.S. inventory data also pressured oil prices. Energy Information Administration figures showed crude stockpiles increased by 3 million barrels to 426.4 million barrels during the week ended September 18, compared with expectations for a 640,000-barrel decline.

Gasoline inventories fell by 1.7 million barrels, while distillate stocks declined by 400,000 barrels.

Diesel markets also remained in focus after reports that the White House was considering a 90-day diesel export ban. The administration later rejected the report as “fake news,” while tight distillate supplies continued to support concerns about the U.S. diesel market.