Oil Prices Drop Amid Hopes UN Diplomacy Could Ease US-Iran Conflict

Oil prices fell to their lowest level in a week on Monday as building diplomatic momentum during the UN General Assembly in New York sparked hopes of a resolution to the US-Iran conflict affecting global energy markets.

At 8.30am UAE time, Brent dropped 2.12 per cent to $101.67 a barrel, marking the fourth consecutive session of declines for the benchmark that tracks two-thirds of the world's oil. Meanwhile, West Texas Intermediate decreased by 2.24 per cent to $98.05 per barrel.

Tim Waterer, chief market analyst at KCM Trade, told Reuters that market participants appear to be scaling back the risk premium on oil based on expectations that diplomatic efforts this week might de-escalate the US-Iran war. However, he noted that uncertainty remains regarding whether those hopes are justified.

On Sunday, US President Donald Trump stated that he is weighing three potential approaches to end the conflict with Iran: “Wiping Iran out”, allowing the nation to “rot economically”, or securing a deal. Speaking to Fox News, US President Donald Trump acknowledged that Washington has received a list of demands from Tehran and expressed openness to meeting Iranian President Masoud Pezeshkian in New York for the UN General Assembly starting on Tuesday, though Tehran has not yet indicated if it is receptive to such a meeting.

Alongside these developments, US President Donald Trump is scheduled to hold meetings with Gulf officials in New York as part of a high-stakes US-Arab diplomacy push. This gathering is expected to feature representatives from Iraq, Jordan, and Egypt amid growing appeals for direct dialogue with Tehran. Discussions at the UNGA will primarily address Iran, its regional proxies, and the long-term outlook of the US-Iran conflict.