WASHINGTON (dpa-AFX) - Partly shedding the gains from recent sessions, crude oil prices have tumbled on Monday following Iran's announcement that a delegation from Qatar visited Iran yesterday to discuss de-escalation of regional conflicts. However, prices received support from a CNN report that stated that the U.S. is prepared to launch fresh, big-scale strikes on Iran.
WTI Crude Oil for December delivery was last seen trading down by $1.27 (or 1.27%) at $102.00 per barrel.
The U.S.-Iran war, which began toward the end of February, is showing no sign of ending as the heated exchange of verbal rhetoric by leaders from both nations lowered expectations of an end to the war.
The Strait of Hormuz remains closed for international traffic. While the U.S. claimed tanker traffic has improved with U.S. support, Iran dismissed it as incorrect and re-asserted its authority over the strait.
Adding to war concerns, last week, the New York Times reported that the U.S. and Israel are jointly preparing to conduct strikes on Iran's nuclear installations and other strategic locations.
Reportedly, the strikes could begin after the midterm elections in the U.S. are over in the first week of November.
On Friday, before leaving for Florida, U.S. President Donald Trump remarked that the U.S. can end the war with Iran quickly if it wants to or let Iran wither under sanctions.
Last week, due to the war-threat and long-term supply disruption concerns, crude oil prices skyrocketed over 5%. This raised long-term inflationary concerns and the consequent economic challenges globally.
Fears of big-scale re-escalation were tempered after Iran's Foreign Ministry stated today that a delegation from Qatar visited Iran on Sunday as a part of its effort to de-escalate regional tensions. Of note, Qatar, along with Pakistan, has been working as a mediatory to end the U.S.-Iran war.
Today, Iran is hosting officials from Saudi Arabia, Turkey, and Pakistan (Mecca Defense Alliance) for talks related to regional security. These negotiations gain importance amid renewed attacks on Saudi Arabia by the Iran-aligned Houthi militants of Yemen.
In the absence of any attack by the U.S. on Iran over the weekend, crude oil prices plunged initially. However, tensions due to the ongoing Saudi Arabia and Houthi conflict continued to support crude prices.
The Iran-backed militant group claimed striking an airport and oil facilities in Saudi Arabia on Saturday.
Saudi Arabia stated that it intercepted a new wave of missiles and drones on Sunday launched by the Houthis.
Adding to this, citing two U.S. officials, CNN reported on Monday that U.S. forces in the Middle East are prepared to launch new, potentially major, military operation against Iran 'within 96 hours of receiving' an order from Trump.
The report added that this time, the strike could be a big effort and may not be simple strikes to hit radars, launchers, and other assets in Iran which Iran can reconstitute quickly.
Orders to commence the exercise are expected to come anytime after the elections.
If the proposed strikes happen, Iran and the Houthis could retaliate immediately by targeting U.S. facilities in the region and even go beyond.
Meanwhile, speaking at the International Energy Week Conference, the Executive Director of the International Energy Agency Fatih Birol stated that he does not expect energy markets to return to where they were before the Iran war, even in 2027.
Birol also raised concerns about the demand for fuels including diesel as Europe braces for winter.
The U.S. dollar index was last seen trading at 101.90, up by 0.09 (or 0.09%) today.
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