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Crude oil prices fell sharply Monday to trade below $100 per barrel, after President Donald Trump reportedly decided against bombing Yemen for now and indicated he was open to diplomacy with Iran.
U.S. West Texas Intermediate futures dropped 5.4% to $94.85 per barrel by 10:48 a.m. ET. Brent crude, the international benchmark, fell 4.1% to $99.61 a barrel. Oil prices are down for the fourth consecutive session as the market pulls back from the recent rally.
Trump told Fox News he would probably be open to meeting with Iranian President Masoud Pezeshkian at the UN General Assembly this week.
And the U.S. president has decided against bombing Iran-allied Houthi militants for the time being despite pleas from Saudi Arabia, Trump administration officials told The New York Times.
WTI year to date
Meanwhile, crude exports from the Middle East have proven resilient after Saudi Arabia shut down its critical East-West pipeline due to attacks, JPMorgan analysts said in a Sept. 18 note. Total oil flows averaged 17 million barrels per day in the past 10 days, or 6 million bpd below the 2025 average, they said.
Exports through the Strait of Hormuz have steadily risen with flows from the broader Middle East reaching about 80% of pre-war levels, said Ryan McKay, director of commodity strategy at TD Securities.
"It appears that without a major escalation Iran may have lost notable leverage in the Strait," McKay said in a Monday note.
But the security situation in the region remains volatile and prone to sudden escalation. The oil market "is grappling with multiple near-term drivers that have been a tug of war for prices," McKay said.
The Houthis said they launched missiles at the Saudi capital Riyadh and targeted Aramco facilities at the crude export terminal of Yanbu on the Red Sea over the weekend.
At least two tankers have come under attack while transiting the Strait of Hormuz over the past day, according to incident reports from the United Kingdom Maritime Trade Operations Centre.
And Trump told Fox that he is in a "deciding mode" and "very big things" are going to happen soon regarding the Iran war. He described the choices as "wiping Iran out, letting them rot economically or making a deal," according to Fox.
Iran's Revolutionary Guard, meanwhile, warned it will expand the "geography of the conflict" if the U.S. hits the Islamic Republic with renewed strikes, according to the state media outlet Tasnim.
