Oil prices rose for a second straight session as a stalled U.S.-Iran diplomatic push kept Middle East supply risk in focus, even as Saudi exports recover from pipeline damage. Trump denied offering Tehran sanctions relief, while Iran's president said Tehran remains open to talks but will not accept coercion.
Oil prices climbed on Tuesday, with Brent crude futures rising 1.5% to $106.90 a barrel and West Texas Intermediate gaining 1.3% to $93.80. The advance extended Monday's gains, even though Brent had climbed near $109 a barrel in the previous session before paring gains to settle around $105.
Diplomatic deadlock persists
Qatari mediators were set to hold separate talks with Iranian Foreign Minister Abbas Araqchi and U.S. officials over an amended seven-day proposal Iran put forward last week, Reuters reported, citing sources. Both sides remained pessimistic about reaching an agreement before the U.S. midterm elections.
The uncertainty deepened Monday when President Trump denied offering Iran any sanctions relief, rejecting reports that he was willing to ease sanctions and free frozen funds for concrete steps on Tehran's nuclear program. According to Trump's post on Truth Social: "This is untrue. I offered them NOTHING." Iranian President Masoud Pezeshkian, in a CBS interview, said Tehran remains open to talks but will not accept coercion. Araqchi said any move to reopen the Strait of Hormuz depends on Iran's conditions being met.
Saudi flows recover, but risk premium holds
Physical supply told a different story. Crude exports from key Middle Eastern producers rose to 12.8 million barrels per day in September, the highest since February, according to preliminary Kpler data, with Saudi Arabia and the UAE driving much of the gain. Saudi Arabia has repaired its East-West pipeline and resumed exports from Yanbu, restoring a route that bypasses Hormuz and can carry up to 7 million barrels per day.
Yet the recovery hasn't fully eased the market's worries, since moving crude around the Gulf remains costly and difficult. The disruption has also tightened refined-product markets: record diesel prices have pushed the White House to consider regulatory changes broadening sales of red-dyed diesel. Speculation over U.S. diesel export restrictions has widened the Brent-WTI spread.
The underlying conflict, which Trump launched alongside Israel in February as "Operation Epic Fury," has already disrupted global energy supplies and fuelled global inflation. With mediators still shuttling between Washington and Tehran, traders are left pricing Middle East risk against a supply recovery that remains only partial.
Sources: Commodities & Futures News, Commodities & Futures News
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