Oil Below $100 Bbl as U.S.-Iran Diplomacy Awaited at U.N.


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures fell for a fifth straight session 
Tuesday (9/22) as energy markets awaited hints at diplomacy from U.N. general 
assembly speeches by U.S. President Donald Trump and his Iranian counterpart 
Masoud Pezeshkian that could signal a reopening of the Strait of Hormuz to oil 
and other energy shipments.

   The front-month contracts for both WTI and Brent crude both remained beneath 
$100 bbl after a senior Iranian official was quoted telling media that the U.N. 
podium in New York would present a "golden opportunity" for the U.S. to lift 
its naval blockade on Iranian cargoes and for Tehran to reciprocate by 
reopening the Hormuz.

   Trump has told a news channel that he would "probably" be open to a sit-down 
with Pezeshkian.

   Neither the White House nor the Iranian authorities have confirmed any 
face-to-face talks between the two presidents. Both leaders will address the 
assembly this week, Trump scheduled to go on Tuesday after U.N. 
Secretary-General Antonio Guterres and Pezeshkian on Wednesday (9/23). It will 
be the first event featuring the two leaders since the earnest start of the 
U.S.-Iran war in March, and Pezeshkian's first appearance on U.S. soil amid the 
seven-month-long conflict. 

   By 9:26 a.m. ET, NYMEX WTI crude for October delivery fell $2.44, or 2.57%, 
to $93.34 bbl. The session high was $97.42.

   ICE Brent for November delivery moved down $2.00, or 1.97%, to $98.34 bbl. 
It reached as high as $102.30 earlier in the day.

   Downstream, NYMEX ULSD for October delivery eased $0.0989, or 2.14%, to 
$4.7906 gallon. It peaked at $4.9571 during the session.

   RBOB for October advanced $0.0140, or 0.59%, to $3.4839 gallon. The high for 
the day was $3.5040.

   The U.S. dollar index gained 0.014 points to 100.170 against a basket of 
currencies.

   Crude futures have lost about $10 bbl since the close of September 15 
despite preliminary tanker tracking services on the Hormuz reporting the 
passage of only two commodity-carrying vessels on Monday (9/21) compared with 
10 at the weekend.

   Despite the market's focus on a potential breakthrough in the conflict, Bank 
of America

   raised its second-half Brent crude forecast, warning of a spike toward $150 
bbl if geopolitical tensions worsened and physical supply bottlenecks 
persisted. BofA noted that while diplomatic overtures offered temporary 
headline relief, spare production capacity across key producers remained 
exceptionally constrained following months of infrastructure damage and 
regional transport diversions.

   Structural risks to global energy flows remain active on multiple fronts. In 
the southern Red Sea corridor, ongoing clashes between Houthi forces and 
Saudi-backed units in Yemen continue to threaten the Bab el-Mandeb Strait, a 
vital maritime bypass Saudi Arabia relies upon to route crude into global 
channels.

   In North Africa, output from Libya's 340,000 bpd Sharara field dropped to 
approximately 127,000 bpd after an armed faction blockaded a pipeline 
connecting the asset to the Zawiya export terminal.

   Meanwhile, middle distillate markets remain structurally tight as Russia 
contemplates extending its producer-level diesel export ban into October. 
Continuous Ukrainian drone strikes on domestic refineries have crimped Russian 
processing capacity, helping drive diesel and heating oil prices to multi-year 
highs across Western markets.




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