Analysis: US-Iran talks prospects lift market expectations, oil prices fall but supply risks remain

PANews, September 25 - Oil prices fell on Friday as the market weighed the possibility of US-Iran ceasefire talks while also worrying that escalating Houthi attacks on Saudi Arabia could disrupt supply from this major Middle Eastern oil producer. This followed a week of sharp market volatility. According to sources close to the discussions, US and Iranian negotiators meeting in New York this week have explored a path to end the conflict in phases, including Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade on Iran.

Iranian President Pezeshkian said on Thursday that when the war ends still depends on the US decision. In any case, shipping traffic figures released by Reuters still show that the situation at the physical supply level remains fragile. On Wednesday, only 10 commodity vessels passed through the Strait of Hormuz, up from 7 the previous day but still significantly below the average of about 17 per day over the past 10 days. Positive news on diplomatic progress may help oil prices shed some of the geopolitical premium, but shipping data still indicate that any genuine normalization remains some distance away.