WEB DESK: Oil prices climbed more than 1% on Monday after US President Donald Trump rejected an Iranian proposal aimed at ending the conflict and reopening the Strait of Hormuz, keeping concerns over Middle East supply disruptions elevated.
Brent crude futures gained $1.32, or 1.27%, to $105.64 a barrel by 0036 GMT, while US West Texas Intermediate (WTI) crude increased 70 cents, or 0.76%, to $93.11 a barrel.
Iran presented a peace proposal at the United Nations General Assembly in New York last week, saying the initiative had been conveyed to Washington through Qatari mediators. Trump said on Saturday that he had turned down the proposal, but told Axios in a phone interview on Sunday that US officials were expected to hold further discussions this week.
“Geopolitical risks remain elevated, as the Houthis and Iran continued their attacks on Saudi Arabia, leaving regional supply flows vulnerable,” ANZ analysts said in a note.
The Saudi-led coalition in Yemen said early Saturday that it had intercepted two ballistic missiles and two drones launched by Iran-backed Houthi forces towards Saudi territory.
Brent crude ended last week 0.4% higher, while WTI posted a 7.9% decline amid concerns that Washington could restrict diesel exports in an effort to contain record domestic prices, potentially reducing US refinery production.
“Refined oil products remain a pressure point, with record US diesel prices intensifying inflation risks and prompting renewed debate over potential export curbs,” the ANZ analysts said.
They warned that restrictions on US diesel exports could reduce supplies in international markets, with European prices already responding to the possibility of lower American shipments.
Meanwhile, crude exports from major Middle Eastern producers recovered to 12.8 million barrels per day in September, their highest level since the war began in February, according to preliminary data from Kpler released Monday.
The increase was driven largely by higher shipments from Saudi Arabia and the United Arab Emirates.
Oil flows through the Strait of Hormuz also recovered, with shipments expected to reach around 7.4 million barrels per day this month. Saudi Arabia shifted some exports from its Red Sea port of Yanbu to Ras Tanura on the eastern coast after attacks damaged its East-West pipeline, the data showed.
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