Oil continued to fall after signals of US-Iran talks

Global oil prices continued to decline for the sixth consecutive trading session - the longest streak of Brent declines in more than a year. The market reacted to the prospect of restoring a key oil pipeline in Saudi Arabia and signals of possible progress in US-Iran talks. This was reported by Bloomberg.

Brent fell to about $98 per barrel on Wednesday. Over six trading sessions, the benchmark grade lost more than 9%. American WTI for November delivery traded near $89 per barrel.

If Brent ends the day lower, it will be the sixth consecutive negative session - the longest such streak since August 2025.

One of the key factors for the market was the restoration of Saudi Arabia's strategic East-West pipeline. It connects oil-producing areas in the east of the country with the Red Sea port of Yanbu and allows Saudi Arabia to export oil bypassing the Strait of Hormuz.

The pipeline was halted after attacks in September. As Saudi Gazette writes, Saudi Arabia has already started restoring its operation: oil has flowed through the system at reduced intensity, and authorities are preparing to resume shipments through Yanbu.

The maximum capacity of East-West is about 7 million barrels per day. Because of this, a full return of the pipeline could significantly increase the volumes of Saudi oil that can be exported without passing through the Strait of Hormuz.

The second factor in the price decline was negotiations surrounding the US-Iran war. US President Donald Trump said that the American side held "very productive" contacts with Iranian representatives in New York and that talks would continue.

At the same time, Al Jazeera reports that the negotiations took place mainly through intermediaries: American and Iranian delegations did not necessarily contact each other directly. US Special Representative Steve Witkoff said that intermediaries relayed proposals between the parties throughout the day.

Tehran links further progress to the easing of American pressure and blockade. The Iranian side has previously indicated that, if Washington takes appropriate steps, it is ready to restore traffic through the Strait of Hormuz within seven days.

Distruptions in tanker passage through Hormuz became one of the main factors behind the sharp rise in oil prices this year. Despite the current six-day decline, Brent is still more than 60% more expensive than at the beginning of 2026.

The restoration of alternative routes from Saudi Arabia and the prospect of reducing tensions around Iran are now reducing the geopolitical premium embedded in oil prices. At the same time, the situation remains unstable: full traffic through the Strait of Hormuz has not yet been restored, and US-Iran diplomatic contacts have not yet concluded with an agreement.

Based on materials from: Bloomberg, Saudi Gazette, Al Jazeera