Oil prices dropped after Iran said it was reviewing Washington’s response to its peace proposals while remaining open to diplomacy to end the war with the United States.
Brent crude futures fell 92 cents or 0.9% to $102.16 a barrel while West Texas Intermediate crude dropped 77 cents or 0.8% to $91.39. The decline followed a 4% rise in the previous session.
A senior Iranian official told the international news agency Reuters that Tehran and Washington remained divided over how to end the war but said diplomatic efforts had to continue.
The official said Iran’s proposals prioritised the lifting of a US naval blockade on Iranian ports and the reopening of the Strait of Hormuz. Tehran was reviewing Washington’s response to those proposals.
The prospect of further diplomatic engagement eased some of the pressure that had built up in oil markets during the conflict.
Priyanka Sachdeva, head of market insights at Phillip Nova said the decline reflected easing geopolitical risk as Gulf supply recovered and “hopes of a US-Iran diplomatic breakthrough grew.”
Uncertainty however remained around the Strait of Hormuz. Iran’s security chief Mohsen Rezaei said the waterway would not reopen until Tehran’s conditions were met.
US Secretary of State Marco Rubio said reaching an agreement with Iran would require considerable work over time and added that President Donald Trump still had military options.
Oil prices also came under pressure as US crude inventories rose by 3 million barrels to 426.4 million barrels. Analysts surveyed by Reuters had expected inventories to fall by 641,000 barrels.
In Rwanda the latest global oil movement came at a time when energy and transport costs remained among the areas recording strong price increases.
The latest figures from the National Institute of Statistics of Rwanda showed that energy prices increased by 45.4% year on year in August while transport costs rose by 24.2%. Overall inflation stood at 15.7% compared with the same month a year earlier.
The figures did not establish that the latest fall in international oil prices had already affected prices in Rwanda but they showed the broader cost pressures facing consumers as global energy markets remained volatile.
Attention remained on further developments in US-Iran diplomacy and the Strait of Hormuz as markets awaited new signals on the direction of international oil prices.
Elie GATETE
RADIOTV10