Key Moments
- WTI crude trades near $93.60 per barrel in Asian dealings, marking a fourth consecutive session of declines.
- Market sentiment improves after Donald Trump signals willingness to meet Iran’s president during the UN General Assembly.
- Drone and missile attacks on Moscow and Riyadh highlight persistent geopolitical risk despite rising hopes for regional diplomacy.
WTI Under Pressure as Traders Focus on Diplomatic Track
West Texas Intermediate (WTI) crude futures extended their recent downturn for a fourth straight session, with prices hovering around $93.60 per barrel during Asian trading on Monday. The latest pullback in crude is being linked to market expectations that stepped-up diplomatic activity could ease the Middle East conflict and help normalize energy flows from the region.
A key catalyst behind the softer tone came from comments by US President Donald Trump, who said he would “probably” be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York this week. In addition to a possible encounter with Iran’s leader, Trump is also expected to meet other Persian Gulf leaders and is slated to hold a summit with Chinese President Xi Jinping.
Diplomatic momentum has been further supported by Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani, who called on Gulf states to work together to restore stability in the region, emphasizing that active messages are currently being exchanged between the US and Iran.
In a sign that shipping conditions are reflecting some of this easing in perceived risk, US Central Command chief Admiral Brad Cooper reported that oil and liquefied natural gas flows through the Strait of Hormuz over the past two weeks have reached their highest levels in six months.
Geopolitical Flashpoints Cap Downside for Crude
Despite the improving diplomatic backdrop, lingering geopolitical tensions are seen as limiting the potential for a deeper selloff in oil. According to BBC reports, Ukraine carried out a large-scale overnight drone and missile operation aimed at Moscow and nearby areas. Russian authorities described heavy air defense activity around the capital, with Moscow Mayor Sergei Sobyanin stating that 450 drones were launched at the city, hitting a key oil refinery and a residential building.
Separately, Yemen’s Houthi movement claimed responsibility for missile and drone attacks on what it described as “sensitive” sites in the Saudi capital, Riyadh. As reported by the Guardian on Saturday, the claims followed reports of flames and dense smoke near the city’s main airport.
Market Drivers at a Glance
| Factor | Detail |
|---|---|
| Price action | WTI trades around $93.60 per barrel during Asian hours, extending a four-day decline. |
| Diplomacy | Trump signals he would “probably” meet Iran’s president at the UN General Assembly; Gulf and US-Iran back-channel contacts highlighted by Qatar. |
| Logistics | Oil and LNG shipments through the Strait of Hormuz reach their highest level in six months over the last two weeks. |
| Military activity | Ukraine reportedly launches extensive drone and missile strikes on Moscow; Houthis claim attacks on “sensitive” targets in Riyadh. |
RBC: Limited Inflation Pass-Through from Higher Energy Costs
Economists at Royal Bank of Canada note that the recent climb in energy prices has not yet translated into a broad-based acceleration in inflation. According to RBC, “evidence of pass-through to broader inflation has been limited so far,” and they “expect the impact in coming months will remain constrained as higher fuel costs erode margins across business supply chains before reaching final consumer prices.”
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