Oil prices extended their decline for a sixth consecutive session on Wednesday, falling to around two-week lows as improving crude supplies from the Gulf and hopes of progress in US-Iran negotiations eased concerns over potential disruptions to global energy markets.
Brent crude futures fell 78 cents, or 0.79%, to $98.47 a barrel, while US West Texas Intermediate (WTI) declined $1.21, or 1.34%, to $89.31 as of 0651 GMT.
Both benchmarks have now recorded six straight sessions of losses.
The latest decline reflects a shift in market sentiment after weeks of heightened concern over oil supply disruptions linked to conflict in the Middle East.
Investor attention has increasingly turned to diplomatic efforts between the United States and Iran.
US President Donald Trump said on Tuesday that discussions with Iranian representatives and mediators were progressing, raising expectations that an agreement could eventually help ease tensions and improve energy flows.
The prospect of reduced geopolitical tensions has taken some pressure off oil prices, although the situation remains uncertain.
Supply expectations have also improved following the restart of Saudi Arabia’s East-West Pipeline, an important route for transporting crude to the Red Sea.
The pipeline had been shut after drone attacks disrupted operations earlier this month.
Saudi Arabia has also offered additional crude supplies to Asian refiners through routes outside the Strait of Hormuz, while Iraq has increased exports and is looking to raise shipments through Turkey.
The developments are providing traders with greater confidence that some of the supply lost during the regional disruptions can be replaced.
US crude inventories have added further pressure to prices.
Industry data showed that US crude stocks increased by 1.8 million barrels in the week ending September 18, contrary to expectations for a decline.
However, the oil market remains exposed to significant risks. Disruptions around key shipping routes could quickly reverse the recent price decline, particularly if diplomatic efforts fail or regional tensions intensify.
While crude supplies are improving, refined fuel markets remain tight, with diesel and jet fuel facing continued supply constraints.
This means falling crude prices may not immediately translate into lower prices for all petroleum products.
The continued decline in oil prices will therefore depend heavily on developments in Middle East diplomacy, the restoration of disrupted supply routes and the ability of producers to maintain sufficient crude flows into global markets.
For oil-importing economies, sustained lower crude prices could ease some pressure on energy costs and inflation.
For oil-producing countries, however, a prolonged decline could reduce export revenues and place additional pressure on government finances.
The six-session decline marks a significant change from the sharp price increases recorded earlier in the month when concerns over Middle East supply disruptions pushed crude above $100 a barrel.
For now, traders are closely watching the US-Iran talks and the recovery of Gulf oil flows as the market reassesses the balance between geopolitical risk and available supply.
