Oil slips below $115 as Saudi and Iran discuss de-escalation
What's the story
Crude oil prices continued their downward trend on Tuesday, with the global benchmark Brent Crude trading at $114.94 per barrel, a 0.73% decline. The fall comes as Saudi Arabia and Iran engage in de-escalation talks amid rising regional tensions. The meeting was held after a series of attacks by Yemen-based Houthi militants on Saudi Arabia in recent weeks.
Diplomatic efforts
Saudi defense minister meets Iranian president
Saudi Defense Minister Prince Khalid bin Salman met Iranian President Masoud Pezeshkian in Tehran on Monday.
The meeting was attended by senior officials from Pakistan and Turkey, who are also part of the defense pact with Saudi Arabia.
This diplomatic effort comes amid fears of further attacks on energy infrastructure and shipping routes, which have kept oil prices high.
Upcoming meetings
Putin to meet Iranian president, Qatari emir at energy summit
Russian President Vladimir Putin is also set to meet with his Iranian counterpart and Qatar's Emir Sheikh Tamim bin Hamad Al Thani at an energy summit in Moscow on Tuesday.
These high-level meetings underscore the global attention on the Middle East's geopolitical landscape and its impact on oil prices.
Market rate
Oil prices have remained above $100
Amid the ongoing conflict and potential escalation of military offensives, crude oil prices have remained above $100.
The worst-case scenario for commodities, feared at the start of the US-Iran war in March this year, has not materialized.
This is largely due to a makeshift shipping arrangement that has kept extreme scenarios such as oil hitting $200 at bay.
Price impact
Geopolitical uncertainty adds $20 to oil prices
Geopolitical uncertainty has added roughly $20 a barrel to oil prices, Michael Alfaro, chief investment officer at Gallo Partners, said.
He warned that a major strike on Saudi Arabia's East-West pipeline or other refining infrastructure could send prices sharply higher.
However, he also cautioned that such an increase could destroy demand if prices jump above $120 per barrel.