Oil prices fell on Thursday, September 24, after Iran signalled its willingness to continue diplomatic talks with the United States on ending the war. The market partially pared back the geopolitical risk premium linked to potential supply disruptions from the Middle East, Reuters reported.
Brent crude futures fell by 92 cents, or 0.9%, to $102.16 per barrel. WTI prices declined by 77 cents, or 0.8%, to $91.39 per barrel.
“Oil prices are falling as the market partially reduces the geopolitical risk premium”
Priyanka Sachdeva, head of market analysis at Phillip Nova
According to Sachdeva, the price decline is being driven by the resumption of supplies from Persian Gulf countries and growing expectations of a possible diplomatic breakthrough between Washington and Tehran.
Talks between Iran and the United States
Iran and the United States have yet to agree on terms for ending the war. A senior Iranian official told Reuters that Tehran is reviewing Washington’s response to its peace proposals.
Iran’s key demands include lifting the naval blockade of its ports and restoring shipping through the Strait of Hormuz.
Reaction to reports on diesel exports
Oil market participants were also watching developments surrounding diesel fuel. Diesel futures fell by about 5% following a Politico report on a possible 90-day U.S. ban on diesel exports.
The White House denied the report. U.S. Energy Secretary Chris Wright said such a ban would not produce the expected result, although Donald Trump expressed his willingness to support it.
Analysts warn that export restrictions may fail to lower domestic energy prices in the United States, while creating additional problems for the global market and increasing economic instability.
According to preliminary JODI estimates, the United States increased oil production by 0.2% to a record 13.817 million barrels per day for this period. Production rose by 1.3% year on year.
