Oil drops for fourth straight day as Saudi exports recover

Oil prices fell for a fourth consecutive session on Monday, with Brent crude settling at $100.34 a barrel — down 3.4% — and West Texas Intermediate dropping 4.5% to $95.78, as recovering Saudi Arabian exports and the prospect of US-Iran diplomacy eased the geopolitical risk premium that has driven crude more than 60% higher this year.wsj+1

The four-day slide has erased roughly 8–9% from crude benchmarks, bringing both to their lowest closing levels since September 8.ndtvprofit+1

Saudi Shipments Surge Through Hormuz

A key driver of the selloff has been a sharp recovery in Saudi crude flows through the Strait of Hormuz. Satellite tracking data showed Saudi Arabia loaded around 14 million barrels onto seven very large crude carriers at the Ras Tanura terminal over the weekend, redirecting exports toward the Persian Gulf after Houthi drone attacks damaged its East-West pipeline linking oil fields to the Red Sea port of Yanbu.newswav+1

JPMorgan analysts noted that Saudi oil moving through the Strait of Hormuz averaged 2.9 million barrels per day over the prior six days, up from just 700,000 bpd in August. "Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia's East-West pipeline," the bank said in a September 18 note cited by Reuters. US Central Command Admiral Brad Cooper said on Sunday that oil shipments through the waterway had reached their highest level in six months, supported by US naval protection and mine-clearing operations.fxstreet+1

Diplomatic Signals at the UN

Markets are also pricing in the possibility of a diplomatic breakthrough. President Donald Trump told Fox News ↘ 1.00% he would "probably" be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York, where he is scheduled to speak on Tuesday. US Ambassador to the UN Michael Waltz echoed the president's openness to dialogue.bloomingbit+2

Iran, meanwhile, signaled its own conditions. Al Jazeera reported that Iran's security chief Mohsen Rezaei said Tehran had conveyed terms to mediators for re-engaging in negotiations.newswav

Risks Persist Despite the Pullback

Analysts cautioned that the selloff's scope may be limited. Oil remains up more than 60% in 2026 as the broader Middle East conflict, now approaching its seventh month, continues to threaten energy infrastructure. Russia is poised to extend its ban on most diesel exports beyond the end of September as Ukrainian strikes on refineries persist, while in Libya, output at the Sharara oilfield — the country's largest — has fallen by more than half to around 127,000 barrels per day after an armed group shut a pipeline to the Zawiya export terminal.theedgemalaysia+1

The strain on refined products remains acute. US retail diesel prices climbed to a record $6.51 a gallon on Monday, according to the American Automobile Association, nearly double the $3.695 average a year ago. A shortage of available tankers willing to transit the Strait of Hormuz at elevated insurance rates could also keep transportation costs high even as crude prices retreat.bitget+1