Oil prices fell on Thursday after Iran signalled that it remained open to diplomatic efforts to end its war with the United States, easing some of the geopolitical risk premium that had driven prices higher in the previous session.
Brent crude futures declined 92 cents, or 0.9 per cent, to $102.16 a barrel by 0400 GMT, while US West Texas Intermediate (WTI) futures fell 77 cents, or 0.8 per cent, to $91.39.
The declines came after oil prices surged about four per cent on Wednesday amid heightened tensions surrounding the US-Iran conflict.
Iran and the United States remain divided over how to end the war, but diplomacy must continue, a senior Iranian official told Reuters on Wednesday.
The official said Tehran was reviewing Washington’s response to its peace proposals, which include demands for the lifting of a US naval blockade on Iranian ports and the reopening of the Strait of Hormuz.
Iranian President had earlier told the United Nations General Assembly that Tehran would not surrender to US pressure, underscoring the challenges facing diplomatic efforts to resolve the conflict.
Priyanka Sachdeva, head of market insights at Phillip Nova, said oil prices were declining as markets reduced part of the geopolitical risk premium amid a recovery in Gulf supplies and growing hopes of a diplomatic breakthrough between Washington and Tehran.
“Brent retains a larger geopolitical and sea-route premium because international crude is more directly exposed to Middle East and Hormuz disruption, while WTI benefits more from relatively insulated US supply,” Sachdeva said.
The Strait of Hormuz remains a major concern for the global oil market, with a significant volume of the world’s crude shipments passing through the strategic waterway.
Earlier on Wednesday, Iran’s security chief, Mohsen Rezaei, said the Strait would not be reopened until Iran’s conditions were met.
US Secretary of State Marco Rubio, meanwhile, told reporters on Wednesday that reaching an agreement with Iran would require hard work over a period of time.
Rubio also said US President Donald Trump retained military options as diplomatic efforts continued.
