Oil prices fell on Wednesday after US President Donald Trump said American and Iranian representatives had held “very good” and productive talks at the United Nations.
Brent crude, the international benchmark, dropped to $98.41 per barrel, while US West Texas Intermediate (WTI) fell to $89.23 in afternoon trading in Asia.
The two benchmarks had repeatedly traded above the $100 mark since the outbreak of the Middle East conflict in February.
Trump said the three-hour meeting between the two sides was “very good” and “very productive”, adding that another meeting had been scheduled for the near future.
His comments came shortly after a forceful address to the UN, where he said he faced a “big decision” on whether to reach an agreement with Iran or “annihilate the Islamic Republic and do it quickly”.
The latest development comes nearly seven months after US and Israeli strikes triggered the war.
The conflict has since disrupted global energy supplies, with Iran maintaining the closure of the Strait of Hormuz while the United States enforces a counter-blockade of Iranian ports.
Fighting involving Saudi-backed government forces and Iran-backed Houthi rebels in Yemen has also affected the region, putting further pressure on oil exports through the Red Sea.
Stephen Innes of Quintex Intel said the US-Iran talks were significant because they had shifted market sentiment away from a focus on further escalation towards the possibility of diplomacy, although he noted that a final agreement remained uncertain.
Trump has also said oil prices would fall “as soon as” the United States wins the war.
Meanwhile, Saudi Arabia, the world’s largest crude exporter, has reportedly resumed operations along its East-West Pipeline, an important export route that was shut following drone attacks.
Bloomberg reported that the kingdom was targeting a resumption of exports later this week.
Saudi oil giant Aramco has reportedly informed some Asian refiners that they could soon collect crude from the Red Sea port of Yanbu. However, European buyers were told they would not receive allocations for October, according to Bloomberg.
The decline in oil prices came as Asian markets recorded mixed performances.
Hong Kong’s Hang Seng Index fell one per cent, while Shanghai’s Composite Index closed 0.4 per cent lower.
South Korea’s Kospi rose 0.9 per cent, while Taiwan’s Taiex gained 0.8 per cent.
European markets also opened higher.
Investors were also looking ahead to a meeting between Trump and Chinese President Xi Jinping scheduled for Thursday, with trade expected to be a major issue for discussion.
The US-China trade dispute remains a concern for investors, despite a tariff truce that has lasted nearly a year without a permanent agreement.
Kyle Rodda, senior financial market analyst at Capital.com, said the Middle East conflict remained the more significant issue, particularly whether the United States could secure China’s support in influencing Iran.
At about 0215 GMT on Wednesday, WTI was down 1.4 per cent at $89.23 per barrel, while Brent crude was down 0.9 per cent at $98.41.
The Hang Seng was down one per cent at 24,842.87, while the Shanghai Composite closed 0.4 per cent lower at 3,936.52.
London’s FTSE 100 gained 0.3 per cent to 10,744.98, while the Nikkei 225 was closed for a holiday.
The dollar traded at 157.76 yen, compared with 157.37 yen on Tuesday, while the euro fell to $1.1425 from $1.1451. The pound also weakened to $1.3314 from $1.3344.
AFP
Titilope Adako is a talented and intrepid journalist, dedicated to shedding light on the untold stories of Osun State and Nigeria. Through incisive reporting, she tackles a broad spectrum of topics, from politics and social justice to culture and entertainment, with a commitment to accuracy, empathy, and inspiring positive change.
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