Oil prices fell about 2% on Friday, September 25, as traders weighed reports of a possible US-Iran agreement to reopen the Strait of Hormuz against continuing threats to Saudi Arabia’s oil infrastructure. Reuters reported that Brent crude futures settled at $104.32 a barrel, down 2.1%, while US West Texas Intermediate settled at $92.41, down 2.3%. Dow Jones Newswires independently reported the same closing prices. The move reflected a change in expectations rather than a confirmed restoration of normal oil shipments through the waterway.
The strait is a vital route between Gulf producers and global customers. Before the war that began with US and Israeli strikes on Iran in February, about one fifth of the world’s oil supply passed through it, according to Reuters. Interruptions to shipping and attacks on alternative export routes have kept energy markets sensitive to news about negotiations and regional security.
People close to the negotiations told Reuters that US and Iranian representatives in New York were exploring a phased arrangement under which Iran would reopen the strait and Washington would lift its economic blockade of Iran. The discussions had not produced an announced agreement by Friday. A senior Iranian official told Reuters that Tehran would not soften its position on its nuclear programme even if the United States accepted its proposal on the waterway.
The possibility of relief for shipping competed with fears about attacks by Yemen’s Iran-aligned Houthis on Saudi Arabia. Reuters said those strikes have disrupted oil flows from the major exporter. Preliminary ship-tracking data from Kpler showed 33.7 million barrels of crude moving out of the strait in the week beginning September 20, roughly in line with the previous week rather than evidence of a full return to normal traffic.
Talk in Washington of a possible ban on US diesel exports added another factor to trading; no such ban had been announced. Reuters said the prospect widened the premium of Brent over US crude, while US gasoline futures fell around 4% on Friday. In Europe, energy shares declined 1.3%, while airline stocks including Ryanair and Lufthansa rose more than 2%, according to a separate Reuters market report.
The Friday decline offered some relief to oil buyers, but Brent still closed above $100 a barrel and the security outlook remained uncertain. Investors will watch whether negotiators announce terms for reopening the strait and whether attacks on Saudi facilities and shipping routes continue. Until those questions are resolved, prices could remain responsive to each diplomatic and military development. For now, neither the diplomatic outcome nor the supply response is settled.
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