Oil prices climbed Tuesday after U.S. Treasury Secretary Scott Bessent said all Iranian airlines will be shut down starting Wednesday, deepening concerns over Iran-U.S. tensions. Brent crude gained 1.36% to $101.70 a barrel, while WTI advanced 1.71% to $97.42, even as investors watch for a possible diplomatic opening at the United Nations.
Oil rose Tuesday after Bessent told CNBC that all Iranian airlines will be shut down from Wednesday, reviving worries over escalating Iran-U.S. tensions. The warning added a fresh layer of geopolitical risk to a market already on edge over the Mideast conflict.
Brent and WTI both extend gains
Brent crude futures for November delivery gained 1.36% to $101.70 a barrel as of 3:00 a.m. ET Tuesday.
U.S. West Texas Intermediate futures for October advanced 1.71% to $97.42 a barrel over the same period.
According to CNBC: "That if they land, you cannot provide them with fuel." Bessent laid out the mechanics of the shutdown on CNBC's "Squawk Box," explaining that grounded Iranian carriers would also lose access to landing services and ticket sales or risk exclusion from the dollar system.
A possible diplomatic opening
Still, investors are watching for a possible diplomatic solution. Iranian President Masoud Pezeshkian is set to fly to the United Nations in New York, where he will address the assembly and lay out Iran's position on its war with the U.S. and Israel, according to the country's semi-official Tasnim news agency. Talks with leaders of several countries are also scheduled on the sidelines of the event from Sept. 22 to 26, and on Sept. 28.
Lukman Otunuga, head of market research at FXTM, said attention will likely stay on diplomatic developments. Confirmation of direct talks between Washington and Tehran could ease supply concerns and pressure prices lower, he said, while Tehran has warned that renewed escalation would trigger a significant response that could push crude prices higher.
Traders are weighing both scenarios in futures contract pricing.
Source: CNBC
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