Oil prices fell on Wednesday after US President Donald Trump said representatives of the United States and Iran had held “very good” and “very productive” talks on the sidelines of the United Nations General Assembly.
Brent crude, the international benchmark, and West Texas Intermediate, the US crude benchmark, both traded below the $100-per-barrel mark after Trump disclosed that the three-hour meeting had taken place.
In early Asian trading, Brent fell to about $98.91 per barrel, while WTI dropped to $89.93.
Trump said another meeting had been scheduled for the near future, raising expectations that diplomatic efforts could ease some of the tensions that have pushed oil prices higher amid the ongoing Middle East conflict.
His comments came hours after he addressed the United Nations, where he said he faced a major decision on whether to reach an agreement with Iran or intensify military action.
The United States and Iran remain at odds, with tensions surrounding the Strait of Hormuz continuing to affect global energy supplies and shipping.
Analyst Stephen Innes of Quintex Intel said the US-Iran meeting was significant because it moved the oil market away from pricing based solely on further escalation and towards the possibility of a diplomatic process, although a final agreement remained uncertain.
The decline in oil prices also came as Saudi Arabia reportedly resumed operations along its East-West Pipeline, an important export route that has been affected by the conflict.
Saudi Arabia is reportedly preparing to resume crude exports through the Red Sea port of Yanbu later this week, while oil giant Aramco has informed some Asian refiners that they could soon obtain crude from the facility.
However, European refiners were reportedly told they would not receive oil allocations for October.
Meanwhile, Asian stock markets recorded mixed performances, with Hong Kong’s Hang Seng Index and Shanghai Composite falling, while South Korea’s Kospi and Taiwan’s Taiex gained.
Investors are also watching developments ahead of a planned meeting between Trump and Chinese President Xi Jinping, with trade relations between the world’s two largest economies expected to feature prominently.
The US-China trade dispute remains a concern for global markets, despite both countries maintaining a tariff truce for nearly a year without reaching a permanent agreement.
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