Crude oil declined, with settlements hovering near $100 a barrel, as signs emerged that Saudi Arabia was ramping up exports through the Strait of Hormuz, while fresh optimism over diplomatic progress in the Iran conflict resurfaced in the market.
The global benchmark Brent crude posted a fourth consecutive daily loss, settling 3.4% lower. The October WTI contract, which expired on Tuesday, fell approximately 4.5%.
Satellite data revealed that Saudi oil loadings in the Persian Gulf surged over the weekend, with vessel counts at the kingdom's key Gulf port hitting their highest level since June. Imagery indicated that after a drone strike shut down the crucial East-West pipeline, the country had successfully diverted its export routes back toward the Gulf.
Energy infrastructure is increasingly becoming a focal point in conflict attacks. Ukraine has also been striking Russian refineries, leaving investors concerned that facility repairs and a full return to normal operations could take an extended period, whether in the Middle East or Europe.
Reports suggest the Trump administration has proposed investing $5 billion into a new fund to help Middle Eastern nations rebuild energy infrastructure damaged during the Iran war. Meanwhile, President Trump told Fox News he would "possibly" be open to meeting with Iranian President Masoud Pezeshkian this week during the UN General Assembly in New York. The US is seeking to intensify pressure on Iran's trading partners.
Oil prices have climbed over 65% so far this year, with diesel remaining a central point of global fuel shortages. US diesel prices at the pump have hit another record high, surpassing $6.50 per gallon. The war-driven surge in energy prices has reignited global inflation concerns and added pressure on Trump's Republican Party ahead of the midterm elections.
Diesel futures settled roughly 3% lower on Monday. Admiral Brad Cooper, head of US Central Command, stated that crude oil and LNG shipments through the Strait of Hormuz have climbed to a six-month high over the past two weeks. The UK Maritime Trade Operations office reported that between September 17 and 19, an average of about 32 vessels per day transited the strait with US assistance.
"Market focus has shifted toward improving oil and LNG flows through the Strait of Hormuz, along with the potential for diplomatic breakthroughs during the UN General Assembly in New York," said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. "The most severe pressure facing crude may be starting to ease."
However, supply risks in the Middle East persist. Air raid sirens sounded in the Saudi capital Riyadh over the weekend, marking the first such alert there since the most intense phase of the US-Iran war in March and April, with warnings also triggered in the Red Sea hub of Yanbu and other locations. The kingdom continues to face threats from Yemen's Iran-backed Houthi forces.
October WTI futures declined 4.5% to settle at $95.78 per barrel, while November Brent futures dropped 3.4% to close at $100.34 per barrel.
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