Crude markets swung sharply this week as hopes for U.S.-Iran diplomacy pulled oil prices below the key $100 level on Monday, only for renewed Strait of Hormuz shipping concerns to trigger a rebound on Tuesday. Brent crude fell about 1.7% to $102.09 a barrel in early Monday trading, while West Texas Intermediate dropped nearly 2% to $98.33, its lowest level since September 10. The slide came as President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian during the UN General Assembly, and reports indicated Washington had sent private messages through Qatar seeking a deal.
By Tuesday, the momentum reversed. Brent rebounded about 1.7% to roughly $102 a barrel, while the expiring October WTI contract traded near $97.40 and the actively traded November contract was around $93. The unusual gap between contracts highlighted a tight prompt market. Analysts at FXTM and Gelber & Associates said crude was being pulled in opposite directions: Iranian retaliation warnings and physical supply risks supported prices, while any credible diplomacy could remove part of the geopolitical risk premium.
Saudi export shifts remain a central issue. After attacks forced the East-West pipeline and Yanbu export route offline, Saudi Arabia sharply increased shipments through the Persian Gulf. JPMorgan analysts said Saudi flows through Hormuz averaged about 2.9 million barrels per day, up from roughly 700,000 barrels per day in August, with about 14 million barrels loaded onto seven supertankers at Ras Tanura on Sunday. However, tanker costs to China have risen sharply, and physical traffic remains well below normal: only 17 commodity vessels crossed Hormuz over the weekend compared with 37 the previous week and a pre-war average of about 125 per day. Libya added another complication after armed groups shut a valve serving the Sharara field, cutting around 200,000 barrels per day.
WTI technicals showed a market trying to stabilize, with the November contract defending the $91-$92 region and first major Fibonacci support near $90.96. Resistance was seen at $95.10, with the recent cycle high near $101.80. Oil traders are now watching the UN meetings, U.S.-Iran relations, and Saudi export flows to determine whether prices can hold near $100 or retest higher levels.
