Following President Donald Trump’s announcement that US and Iranian delegates had “very good” talks at the UN, oil prices dropped on Wednesday.
West Texas Intermediate, the primary US contract, and international benchmark Brent crude were both below the symbolic $100 threshold that has been frequently crossed since the start of the Middle East conflict in February.
In afternoon Asian trading, Brent reached $98.41 and WTI dropped to $89.23 per barrel.
The three-hour meeting was “very good,” “very productive,” and “they have another one scheduled in the very near future,” Trump told reporters.
The US president’s remarks were made just hours after he gave a condescending speech to the UN in which he stated that he had to make a “big decision” about whether to “annihilate the Islamic Republic and do it quickly” or reach an agreement with Iran.
With Iran maintaining the closure of the Strait of Hormuz and the United States implementing a counter-blockade of Iranian ports, the enemies remain at a standstill nearly seven months after US-Israeli bombings sparked the war.
Energy exports from the Red Sea are being squeezed by the conflict in Yemen between Iran-backed Houthis and Saudi-backed government forces.
According to Stephen Innes of Quintex Intel, “the three-hour US-Iran meeting matters because it shifts the market from pure escalation pricing toward a genuine diplomatic process, even though a final deal still looks distant.”
Trump has promised that oil prices will drop “as soon as” the US wins the battle.
The largest oil exporter in the world, Saudi Arabia, reportedly resumed operations along its East-West Pipeline, a vital oil export route that had been closed due to drone attacks, which coincided with the decline in oil prices.
According to a source cited by Bloomberg, the monarchy hopes to start exporting again later this week.
However, according to Bloomberg, Saudi oil giant Aramco informed Asian refiners that they may soon pick up crude from the Red Sea port of Yanbu, but the company informed its European counterparts that they would not receive oil in October.
