Brent reverses course amid diplomatic breakthrough hopes

The front-month ICE Brent contract has declined by $2.57/bbl on the day, to trade at $99.33/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude’s price has felt some upward pressure as persistent Middle East tensions continue to support risk premiums.

The US has intensified pressure on Iran, warning that it will shut down Iranian airlines starting tomorrow.

Last week, Washington passed a new bill that extends the Iran Sanctions Act of 1996 through 2031, allowing the US President to impose sanctions on entities doing business with Iran's energy sector.

Downward pressure:

Brent crude’s price has shed last week’s gains, as the market shifted its focus to the United Nations General Assembly summit scheduled to take place in New York this week.

Iranian President Masoud Pezeshkian will be present at the high-stakes summit.

Market participants are hoping for a diplomatic breakthrough at the summit, banking on peace talks to pave the way for a quick resolution of the Middle East conflict – ultimately reopening the Strait of Hormuz to commercial navigation.

US President Donald Trump said that he is open to meeting his Iranian counterpart on the sidelines of the summit, according to media reports.  

Brent crude’s price moved lower “as markets weighed hopes for constructive discussions at this week's UN General Assembly,” two analysts from ING Bank reported.

By Aparupa Mazumder

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