After oil prices fell nearly 8% on the 4th, the market stabilized and kept an eye on the progress of diplomacy between Hormuz Shipping and the US and Iran

The Zhitong Finance App learned that oil prices stabilized after falling nearly 8% for four consecutive trading days because supply concerns in the Middle East have abated, and traders have also noticed a marked increase in diplomatic efforts to end the US-Iran war. The price of Brent crude oil remained around $100 per barrel, while the price of WTI crude oil stabilized below $96 per barrel.

According to satellite data, the amount of oil loaded by Saudi Arabia from within the Persian Gulf has risen sharply, indicating that Saudi Arabia has redirected exports to the Strait of Hormuz after the closure of key multinational pipelines.

On the diplomatic front, US President Trump plans to address the UN General Assembly in New York later on Tuesday and may meet with Iranian President Masood Pezzahizyan. Furthermore, the first summit between China and the US dollar later this week also attracted much attention.

Hamad Hussain, senior climate and commodity economist at KITU Macro, said: “Oil market investors will be watching any developments in diplomacy.” However, he added that since the US and Iran still have huge differences over their claims, it is still uncertain whether the talks can achieve substantial progress.

Oil prices have risen by more than 60% this year, as the Middle East war disrupted transportation through the Strait of Hormuz, and the Russian-Ukrainian conflict damaged energy infrastructure. Refined oil products rose even faster than crude oil, and retail diesel prices in the US jumped to a record high of more than $6.50 per gallon.

The war in the Middle East began with an attack on Iran by the US and Israel in February of this year, and is still involving more countries. Britain has agreed to support the Saudi military against the Houthis backed by Iran. At the same time, the Houthis also threatened shipping near the Red Sea and the Mander Strait.

Additionally, the Trump administration proposed the establishment of a $5 billion fund to help rebuild the region's infrastructure damaged during the war. According to a document outlining the plan, the so-called “Alliance Building and Trust Partnership” program will be led by the US Development Finance Corporation and aims to encourage investment, reconstruction and economic expansion.

Meanwhile, in Libya, production at the country's largest oil field, the Salalah oil field, has dropped by more than half because the pipeline leading to the export terminal in Zambia was shut down by armed groups. People familiar with the matter revealed that the current daily output of the Salalah oil field is about 127,000 barrels.

The general surge in energy prices this year has exacerbated inflation, and the Federal Reserve raised interest rates last week to slow the price increase. St. Louis Federal Reserve Chairman Alberto Mussalem said that further rate hikes may still be needed to achieve the Federal Reserve's goals.

As of press release, the price of Brent crude oil futures for November delivery rose 0.62% to 100.71 US dollars/barrel; the price of WTI crude oil futures for October delivery did not change much, at 95.95 US dollars/barrel, and the November contract rose 0.31% to 92.66 US dollars/barrel.