Oil benchmarks rose modestly on Tuesday as markets recovered some ground following a stretch of declines, with traders closely watching for any developments on potential talks between the United States and Iran at the United Nations General Assembly this week.
Price movements were limited. The Brent crude futures November contract rose 22 cents, or 0.22%, to reach $100.57 a barrel at 0021 GMT. The West Texas Intermediate (WTI) October contract - which is due to expire on Tuesday - inched up 2 cents, or 0.02%, to $95.80 a barrel. The more actively traded WTI November contract climbed 13 cents, or 0.14%, to $92.49 a barrel.
Market commentators said the uptick resembled a short-covering reaction rather than a clear change in supply-demand fundamentals. "The move higher in WTI and the stronger open in Brent have the appearance of a typical short-covering bounce after the recent decline, rather than a fundamental shift," said Tim Waterer, chief market analyst at KCM Trade. "Traders who were positioned for further downside are taking some risk off the table while the diplomatic narrative plays out."
Waterer added that prices were likely to remain range-bound and sensitive to headlines until there was either clear progress or a setback in diplomatic efforts between the United States and Iran.
Diplomatic signals were in focus after a public exchange of threats between Iran and the United States over the weekend. 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 UN General Assembly. Separately, according to Al Jazeera reporting cited in available briefings, Iran conveyed conditions to mediators for re-engaging in negotiations - a position attributed to Iran’s security chief, Mohsen Rezaei.
Beyond the diplomatic path, tensions in the Middle East remained a supply concern. Yemen’s Iran-backed Houthi group said it attacked Riyadh and a Saudi Aramco facility in Yanbu, and reported it had stepped up efforts to cut off Saudi-backed forces from the Red Sea coast. Those actions followed a surge in the group’s military operations, prompting Saudi Arabia to appeal for assistance and, according to reporting citing multiple Iranian sources, China to privately urge Tehran to help curb Houthi attacks.
Operationally, Saudi Aramco has adjusted export routes in response to attacks that affected its infrastructure. The company increased exports through the Strait of Hormuz after attacks on its East-West Pipeline forced it to halt some shipments through Yanbu. Vessel tracking data showed Saudi Aramco loaded about 14 million barrels of crude on seven supertankers inside the Gulf on Sunday.
Additional supply-side disruption was reported in Libya, where Massoud Suleman, chairman of the National Oil Corp, told Reuters that the Sharara oilfield had experienced a partial reduction in production. He did not provide a reason for the decline.
With diplomatic developments and regional security incidents continuing to influence flows and market sentiment, traders are keeping positions flexible while awaiting clearer signs of either progress or escalation that could move prices more decisively.