Arab News | Oil prices fall as Iran says it is open to diplomacy to end the war

SINGAPORE: Oil prices retreated on Thursday after ‌climbing 4 percent in the previous session as Iran said it remained open to diplomacy to end the US-Iran war, though the two countries remain far apart on ways to do so.

Brent crude futures fell 92 cents, or 0.9 percent, to $102.16 a barrel at ​07:00 a.m. Saudi time, while West Texas Intermediate futures eased 77 cents, or 0.8 percent, to $91.39.

Iran and the US remain divided over how to bring an end to their war, but diplomacy must ⁠continue, a senior Iranian official told Reuters on Wednesday, after Iran’s president told the UN General Assembly that ​Tehran would never surrender to US pressure.

The official said Tehran was reviewing Washington’s response to its peace proposals, ​which prioritise lifting a US naval blockade on Iranian ports and reopening the Strait of Hormuz.

“Oil is falling because the market is unwinding part of its geopolitical risk premium as Gulf supply recovers and hopes of a US-Iran diplomatic breakthrough grow,” said ​Priyanka Sachdeva, head of market insights at Phillip Nova.

“Brent retains a larger geopolitical and sea-route premium because international ​crude is more directly exposed to Middle East and Hormuz disruption, while WTI benefits more from relatively insulated US supply,” Sachdeva ‌added.

Earlier on ⁠Wednesday, Iran’s security chief Mohsen Rezaei said the Strait of Hormuz would not be reopened while Iran’s conditions are not met.

US Secretary of State Marco Rubio told reporters on Wednesday that a deal with Iran would involve hard work over a period of time, adding that President Donald Trump also had military options.

Traders also evaluated possible curbs ​on diesel exports. Ultra-low-sulfur ​diesel futures were down about ⁠5 percent in midday trading after website Politico said the Trump administration was preparing plans for a 90-day diesel ban, but the White House denied this.

US Energy Secretary Chris ​Wright had said earlier on Wednesday that a diesel export ban would not work ​even though Trump said he ⁠would support it.

Analysts and market watchers have warned that such a move would do little to ease high energy prices and could worsen global supplies and further disrupt economies.

US distillate stockpiles including diesel and heating oil fell by 428,000 ⁠barrels to ​107.4 million barrels last week, Energy Information Administration data showed.

Meanwhile, US ​crude inventories rose by 3 million barrels to 426.4 million barrels last week, though analysts polled by Reuters had expected a 641,000-barrel draw.