Economy
Brent Drops Below $100 on Saudi Supply Recovery, Iran War Truce Prospects
By Adedapo Adesanya
The price of Brent Crude dropped below $100 per barrel on Monday, trading at $99.51 a barrel after shedding $4.36 or 4.2 per cent, as investors hoped for diplomatic progress on the Iran war due to this week’s United Nations meeting and eyed a partial recovery in shipments from Saudi Arabia.
Also, US West Texas Intermediate (WTI) depreciated during the session by $5.30 or 5.28 per cent to $95 a barrel, despite Iran and the US exchanging new threats on Sunday.
President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the United Nations General Assembly.
The US president threatened Iran with economic collapse and regime failure unless it agreed to make a deal, to which the Middle East nation responded with a threat of its own, saying it would give a harsh response to any American attack.
Meanwhile, the Yemeni Houthis have escalated their offensive against Saudi Arabia, hitting a number of targets in the country over the weekend, including the capital, Riyadh.
Market analysts noted that this should have been bullish for oil as the war expands and escalates in two of the world’s biggest oil chokepoints, but hope has taken the upper hand, even though there is little basis for it.
According to Reuters, China has asked Iran to help rein in the Houthis after an appeal to the Chinese government by Saudi Arabia following the attacks.
The attacks by the Houthis on Aramco’s East-West pipeline have prompted the state oil firm to increase exports through the Strait of Hormuz this month and next after halting some shipments via Yanbu.
Expectations of a partial recovery in shipments from Saudi Arabia further weighed on prices. Saudi Aramco loaded about 14 million barrels of crude oil on seven supertankers inside the Middle East Gulf on Sunday, tanker tracking data showed.
Overall Hormuz traffic kept falling over the weekend as a dozen commodity vessels crossed the strait, down from 35 a week earlier, and Thursday’s crossings totalled four tankers against a 10-day moving average of 16, Kpler data showed.
Meanwhile, Libya’s National Oil Corporation (NOC) said the country’s Sharara oilfield has seen a partial reduction in production, without giving a reason.
