Oil price dips to $100 on hopes of US-Iran diplomacy, partial recovery in Saudi exports

Oil Prices Drop to $100 on Diplomatic Hopes and Saudi Oil Export Recovery

Market Reactions to Diplomatic Developments and Oil Supply Changes

By Nicole Jao and Shadia Nasralla

Oil Price Movements and Market Data

NEW YORK, Sept 21 (Reuters) - Oil prices eased on Monday to their lowest level in 12 days, as investors hoped for diplomatic progress on the Iran war due to this week's United Nations meeting and eyed a partial recovery in shipments from Saudi Arabia.

The Brent crude futures November contract settled at $100.34 a barrel, down $3.53, or 3.4%. The WTI October contract that is expiring on Tuesday fell $4.52, or 4.51%, to $95.78 a barrel. The November contract stood at $92.47.

Both benchmarks fell to their lowest since September 9.

Diplomatic Efforts and Geopolitical Tensions

US-Iran Relations and UN Meeting

On Sunday, Iran and the US exchanged new threats, although President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the United Nations General Assembly.

Investors are pinning their hopes on a breakthrough in peace talks this week, said Tamas Varga, analyst at PVM Oil Associates.

"Just a couple days ago that would have seemed like a very far-flung idea," said Bob Yawger, director of energy futures at Mizuho. "It's a move in the right direction." 

Iran has conveyed its conditions to mediators for re-engaging in negotiations, Al Jazeera reported, citing Iran's security chief, Mohsen Rezaei.

Middle East Conflict and Houthi Attacks

Fighting in the Middle East continued as Yemen's Iran-backed Houthis said they had attacked Riyadh as well as a Saudi Aramco facility in the Red Sea city of Yanbu, while pushing to cut off the Red Sea coast from remaining areas held by Saudi-backed forces.

China has asked Iran to help rein in the Houthis after an appeal to Beijing by Saudi Arabia following the attacks, according to three Iranian sources familiar with the matter.

Saudi Oil Exports and Supply Recovery

Impact of Houthi Attacks on Saudi Oil Routes

The attacks by the Houthis on Aramco's East-West pipeline have prompted the firm to increase exports through the Strait of Hormuz this month and next after halting some shipments via Yanbu.

Expectations of a partial recovery in shipments from Saudi Arabia further weighed on prices.

Recent Export Data and Trends

Saudi Aramco loaded about 14 million barrels of crude oil on seven supertankers inside the Mideast Gulf on Sunday, tanker tracking data showed.

Satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million barrels per day over the past six days, up from just 700,000 bpd in August.

Other Global Oil Supply Factors

Meanwhile, Libya's National Oil Corp Chairman Massoud Suleman told Reuters on Monday that the country's Sharara oilfield has seen a partial reduction in production, without giving a reason.

(Additional reporting by Ahmad Ghaddar in London, Mohi Narayan in New Delhi, and Florence Tan in Singapore; Editing by Jamie Freed, Jan Harvey, Aidan Lewis, David Gregorio and Nia Williams)