Oil prices declined on Monday, reversing part of the previous week’s gains as diplomatic efforts to reduce tensions between the United States and Iran continued. However, further attacks on Saudi Arabian energy infrastructure maintained concerns about potential disruptions to regional supplies.
Brent crude futures fell $1.90, or 1.63%, to $114.82 per barrel by 09:59 GMT, while US West Texas Intermediate (WTI) futures declined $2.08, or 2%, to $101.19 per barrel.
Both benchmarks remained near six-month highs following gains during the previous week. Brent increased approximately 6% over the week, while WTI advanced 2.3%. On Friday, oil prices had settled almost $3 higher.
Market participants continued to assess the impact of military operations in the Middle East, attacks on Saudi Arabian infrastructure and diplomatic discussions involving regional governments.
Houthi Attacks Maintain Concerns Over Saudi Oil Infrastructure
The latest developments followed further attacks attributed to the Iran-backed Houthi movement in Yemen.
Over the weekend, the Houthis said they had targeted pumping stations along Saudi Arabia’s East-West crude oil pipeline and Riyadh airport.
Saudi Arabian authorities reported on Sunday that additional missiles and drones had been intercepted.
The attacks have raised concerns about the security of energy infrastructure and the potential consequences for crude oil transportation.
Saudi Arabia’s East-West pipeline provides a route for moving crude oil across the country, making its operational availability relevant to regional export logistics.
Although oil prices declined during Monday’s trading, the continued attacks contributed to uncertainty over the availability of Middle Eastern supplies.
John Evans, an analyst at PVM Oil Associates, said the additional risks associated with attacks on Saudi Arabia could encourage buying interest if Brent prices returned to the previous week’s lows.
“With the risks heightened by Houthi attacks on Saudi Arabia, any return by Brent to last week’s lows is likely to attract buyers,” Evans said.
He also noted that the extent of a price correction was difficult to assess and that the recent decline had not necessarily changed expectations among investors anticipating further increases.
Qatar and Regional Governments Pursue Diplomatic Discussions With Iran
Diplomatic efforts to reduce tensions continued over the weekend.
Qatari mediators travelled to Tehran on Sunday as part of discussions coordinated with the United States, according to an official familiar with the situation.
The initiative was intended to explore possible measures to reduce regional hostilities.
Senior officials from Saudi Arabia, Turkey and Pakistan, countries associated with the Mecca Pact, were also scheduled to meet Iranian leaders in Tehran on Monday.
The planned discussions would represent their first high-level contact since Houthi attacks on Saudi Arabia became a significant issue in the wider regional conflict.
The diplomatic activity took place alongside continuing military operations and attacks on infrastructure.
No agreement to end the hostilities or restore normal energy transportation conditions had been announced.
As a result, oil markets continued to evaluate both the possibility of diplomatic progress and the risks associated with further disruptions.
Strait of Hormuz and Bab el-Mandeb Shipping Disruptions Continue
The effects of the US-Israeli war involving Iran, which began on 28 February, continue to affect commercial shipping and energy transportation in the Middle East.
Companies have been adjusting their operations in response to disruptions affecting the Strait of Hormuz and the Bab el-Mandeb Strait.
Both waterways are important routes for international trade and energy shipments.
Restrictions on maritime operations can affect vessel availability, transportation costs and delivery schedules for crude oil and other commodities.
According to data compiled by the Washington Institute for Near East Policy, October has recorded the highest number of attacks on commercial shipping in the Strait of Hormuz and surrounding waterways since the organisation began tracking global maritime security incidents in 2017.
The increase in reported attacks has added to concerns about the reliability of regional shipping routes.
Energy companies and shipping operators continue to assess alternative transportation arrangements and the operational implications of the conflict.
Saudi Aramco Plans Singapore Oil Storage From 2027
Separately, Saudi Arabia and Singapore announced plans for Saudi Aramco to begin storing crude oil in Singapore during the second half of 2027.
Energy ministers from both countries confirmed the arrangement, which is intended to improve the resilience of Aramco’s regional supply chain.
The planned storage capacity would provide the state-owned Saudi energy company with an additional location for holding crude oil closer to Asian customers.
Such arrangements can support supply management by providing alternative inventory locations and additional flexibility in delivery schedules.
The announcement comes as energy producers and importers assess the implications of disruptions affecting established shipping routes.
Further operational details about the storage arrangements were not provided in the source information.
IEA Sees Continued Energy Market Effects Into 2027
Fatih Birol, executive director of the International Energy Agency (IEA), also addressed the longer-term implications of the conflict during an industry event in Singapore on Monday.
Birol said he did not expect energy markets in 2027 to return to the conditions that existed before the war involving Iran.
His comments reflected the potential for disruptions to supply chains, transportation arrangements and energy market conditions to continue beyond the immediate conflict.
The assessment comes as producers, consumers and governments evaluate changes in international energy trade.
The duration of the disruption will depend on developments in the conflict, the restoration of shipping operations and adjustments to energy supply arrangements.
Oil Markets Assess Diplomatic Progress and Supply Risks
Monday’s decline in oil prices followed reports of renewed diplomatic activity involving Qatar, Iran and other regional governments.
However, Brent at $114.82 per barrel and WTI at $101.19 remained elevated following the previous week’s increases.
Continued attacks on Saudi Arabian infrastructure, disruptions affecting the Strait of Hormuz and Bab el-Mandeb, and uncertainty surrounding the conflict remain relevant to the supply outlook.
Investors will continue monitoring diplomatic negotiations, regional security developments and changes to international crude oil transportation arrangements.