Oil Falls as Traders Weigh US-Iran Talks Against Supply Risks

Oil prices fell about 2% on Friday, September 25, as traders weighed tentative reports of U.S.-Iran contacts over the Strait of Hormuz against continuing risks to Middle East supplies. Brent crude settled at $104.32 a barrel, down $2.28, or 2.1%, while U.S. West Texas Intermediate fell $2.20, or 2.3%, to $92.41. Sources close to the talks said negotiators from the United States and Iran, meeting in New York, were exploring a phased arrangement that could involve Iran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran. The reports do not establish that an agreement has been reached. The two governments have not announced a deal, and it remains unclear whether the discussions will lead to changes in shipping or restrictions. The price declines reflected a contrast between diplomatic hopes and supply concerns. Preliminary ship-tracking data from Kpler put crude flows through Hormuz at 33.7 million barrels in the week beginning September 20, roughly in line with the previous week. The estimate is provisional and does not establish that shipments have returned to normal.