On Tuesday, oil prices fell slightly after reaching a five-month high. This came as market participants assessed the meeting between the president of Iran and the commander-in-chief of Pakistan’s army (who plays a key mediating role between Iran and the United States), alongside ongoing Houthi attacks on Saudi Arabia’s infrastructure and reports of attacks on vessels in the Persian Gulf, UNN reports, citing Reuters.
The price of Brent crude oil futures fell by 76 cents (0.69%) to $108.79 per barrel. Earlier in the session, the price of the nearest-term contract reached $111.99, the highest level in five months.
The November contract for U.S. West Texas Intermediate (WTI) crude, which expired on Tuesday, fell by $1.87 (1.8%) to $101.79. This was below the intraday high of $110.48—the highest level for the nearest-term contract since April. The December contract, which is currently traded more actively, fell 72 cents to $97.82 per barrel.
Oil surges to a five-month high amid the situation in the Middle East20.10.26, 10:05
Iranian outlet Nournews reported on Tuesday that Iranian President Masoud Pezeshkian discussed mediation efforts and the situation in the region during a meeting in Tehran with Pakistan’s army chief, Field Marshal Asim Munir.
Earlier, in June, a temporary peace agreement was signed through Pakistan’s mediation. However, just a few weeks later, it effectively lapsed amid a new escalation in the confrontation between Iran and the United States.
The talks in Tehran are taking place amid ongoing attacks by Iran-backed Yemeni Houthis. On Monday, they claimed to have carried out a series of attacks on energy, airport and military facilities in Saudi Arabia, including an Aramco facility in the city of Yanbu, the Shaybah oil field, as well as King Khalid International Airport in Riyadh and Abha Airport.
Saudi authorities did not confirm the Houthis’ claims, and Reuters was unable to independently verify the information.
"Oil prices remain at a high level... This indicates that the market is pricing in a significant risk premium, given the volatility of the situation," ING analysts said in their Tuesday review. According to reports, at least 18 vessels have been attacked over the course of two weeks; this is keeping the "risk premium" at a high level, Kpler, a company that tracks maritime transport, said in a review on Monday.
Also on Monday, the Houthis attacked a training camp for government security forces in Yemen’s Shabwah province, killing 58 people and injuring more than 200.
The resumption of the attacks heightened concerns about regional stability and pointed to ongoing risks to energy supplies from the region, keeping oil prices above $100 per barrel.
Israeli Prime Minister Benjamin Netanyahu said he is "determined to complete the elimination of the Iranian regime"; on Sunday, he discussed the issue with U.S. President Donald Trump.