Oil edges lower on Iran diplomacy as Houthi attacks on Saudi Arabia keep supply fears alive

Centre · 1Oil prices fell on Monday 26 October as hopes of talks involving Iran eased fears of further military action in the Middle East; WTI fell $1.76, or 1.7%, to $101.51 and Brent dropped $1.49, or 1.28%, to $115.23 by 0744 GMT, according to Reuters as cited by Hindustan Times. 1 Centre · 1Prices edged lower again on Tuesday 27 October: as of 0000 GMT Brent was down 66 cents, or 0.57%, at $115.15 a barrel and WTI was down 44 cents, or 0.43%, at $101.32, with Brent still close to six-month highs. 2 Centre · 1Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday; Saudi Arabia said the visit sought open negotiating channels to "prevent the return of military escalation", and Iranian state media said the four countries agreed to continue talks on peace and security cooperation. 2

Centre · 1Qatari mediators travelled to Tehran on Sunday, working in coordination with the United States, an official told Reuters; the Tehran meeting was reportedly the first high-level contact since Houthi attacks on Saudi Arabia became a major concern in the wider conflict. 1 Centre · 2Gains from the diplomacy were limited because the Iran-aligned Houthis renewed attacks on Saudi Arabia: they said they hit pumping stations on the East-West crude pipeline and Riyadh airport over the weekend, and Saudi Arabia said it intercepted more missiles and drones on Sunday. 1 2 Centre · 2Prices had climbed the previous week: Hindustan Times says Brent rose 6% and WTI 2.3% over the week, with prices settling nearly $3 higher on Friday after the Houthi attacks, while CNA says Brent surged above $117, the highest since April, after a wave of Iranian attacks on tankers around the Strait of Hormuz, and touched $117 again on Monday. 1 2

Centre · 2The war, which began on 28 February, continues to disrupt shipping; CNA cites a Washington-based think tank's data showing October as the worst month for attacks on commercial shipping in and near the Strait of Hormuz, which carried around a fifth of the world's energy supplies before the conflict. 2 1 Centre · 1Analysts urged caution: Vandana Hari of Vanda Insights said relief could be temporary and that markets expect possible US strikes on Iran after the 3 November US midterm elections, with President Donald Trump not ruling out further strikes; Priyanka Sachdeva of Phillip Nova said the dip reflected position adjustments rather than a real improvement in supply. 1 Centre · 2Other supply news: Saudi Aramco plans to store crude in Singapore from the second half of 2027, the two countries' energy ministers said, and IEA chief Fatih Birol said he did not expect energy markets in 2027 to return to pre-war levels; separately, Russian refiners are raising diesel output in October after export quotas were granted. 1 2