Brent crude fell below $100 a barrel on Monday, settling at $99.57, a decline of 4.14 percent, according to OilPrice. West Texas Intermediate dropped to $95.16, down 5.12 percent. The move marked Brent's lowest level since September 10 and the fourth consecutive session of losses, as traders unwound part of the geopolitical risk premium that had pushed prices well above $100 in recent weeks.
Gulf News reported slightly different settlement figures, with Brent at $99.96 (down 3.76 percent), WTI at $95.29 (down 5.00 percent), and Murban crude at $111.20 (down 5.70 percent). Natural gas on the Henry Hub benchmark slipped 2.20 percent to $2.848 per million British thermal units.
The selloff was driven by two converging forces. First, expectations of diplomatic engagement between Washington and Tehran gathered momentum ahead of the United Nations General Assembly session. US President Donald Trump indicated willingness to meet Iranian President Masoud Pezeshkian, raising the prospect of a negotiated de-escalation that could ease sanctions on Iranian oil exports and reopen the Strait of Hormuz to commercial shipping.
Second, Saudi Arabian oil exports recovered sharply after months of disruption. Flows through Hormuz averaged 2.9 million barrels per day over the six days to September 20, up from roughly 700,000 barrels per day in August, according to JPMorgan estimates cited by OilPrice. Kpler data showed total Saudi exports rising above 4 million barrels per day in September, compared with 2.4 million barrels per day in August. The increase reflected both the partial restoration of export routes and the restart of production capacity that had been offline since Houthi attacks on energy infrastructure.
Despite the supply improvements, significant fragilities remained. Houthi forces launched attacks on Riyadh and Saudi Aramco's Yanbu facility over the weekend, and Saudi Aramco had already shut down its East-West Pipeline, the main conduit for shipping crude to the Red Sea. Vessel traffic through the Strait of Hormuz remained severely constrained, with only 17 merchant ships transiting during the week, down from 37 the previous week.
Tim Waterer, chief market analyst at KCM Trade, told OilPrice that a portion of the risk premium was being stripped from prices as the market recalibrated toward a diplomatic scenario. However, he cautioned that the underlying supply disruptions had not been fully resolved, and any collapse in talks could quickly reverse the downward move.
The decline in Brent came after a volatile period in which the benchmark had surged past $100 following the Houthi conquest of Mocha and subsequent attacks on Saudi energy facilities. The September 10 high had been $107.60. Monday's drop suggested that markets were placing greater weight on the prospect of diplomatic progress than on the ongoing physical supply constraints, a shift that would be tested in the coming days as the UN General Assembly proceedings unfold.
Sources
- [OilPrice: Oil Prices Slide as Traders Bet on Iran Diplomacy](oilprice.com)
- [Gulf News: Oil dives below $100 as Saudi supply recovers and Iran diplomacy sparks hope](gulfnews.com)
