Oil prices fell nearly 2 percent on Monday, reaching their lowest level in more than a week as markets watched for signs of a possible diplomatic breakthrough in the US-Iran war.
Brent crude futures for November delivery dropped $1.78, or 1.71 percent, to $102.09 a barrel by 0655 GMT. The contract had fallen 0.91 percent in the previous session.
US West Texas Intermediate (WTI) crude for October, which expires on Tuesday, declined $1.97, or 1.96 percent, to $98.33 a barrel after losing 1.58 percent on Friday.
Both benchmarks touched their lowest levels since September 10 during early trading.
Analysts said some of the recent risk premium in oil prices was easing as investors hoped this week’s United Nations General Assembly could create an opportunity for talks between Washington and Tehran.
“It seems that a degree of risk premium is being removed from oil prices on hopes that a diplomatic path to de-escalate the US-Iran war may arrive this week,” said Tim Waterer, chief market analyst at KCM Trade.
However, he cautioned that it remained unclear whether those hopes would translate into actual progress.
Tensions remain high in the region despite the market’s focus on diplomacy. US President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the UN gathering in New York this week.
Iran has also communicated conditions to mediators for returning to negotiations, according to comments by its security chief Mohsen Rezaei cited by Al Jazeera.
At the same time, attacks by Yemen’s Houthis have raised fresh concerns over oil supplies from Saudi Arabia. The group said it had targeted sites in Riyadh and an Aramco facility in Yanbu.
The attacks have affected Saudi Arabia’s East-West pipeline, prompting the state oil company to shift more shipments towards the Strait of Hormuz after halting some exports through Yanbu.
Despite the disruption, oil flows from the region have remained relatively strong. JPMorgan analysts said total flows averaged 17.1 million barrels per day over the past 10 days.
Saudi Arabia has also increased shipments through the Strait of Hormuz. Satellite data showed flows averaging 2.9 million barrels per day over the past six days, compared with 700,000 barrels per day in August.
The stronger flow of Saudi crude has helped ease some concerns about a prolonged supply shortage, adding to the downward pressure on oil prices.
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