Oil prices fall as US-Iran truce hopes outweigh Houthi attacks on Saudi Arabia

Oil prices fell on Friday, September 25, 2026, as markets weighed the possibility of a truce between the ‌United States and Iran against concerns that increasing attacks against Saudi Arabia by Houthi rebels could disrupt supply from the key Middle Eastern producer.

Brent was down $1.47, or 1.4%, at $105.11 a barrel at 0541 GMT, while West Texas Intermediate (WTI) was down $2, or 2.1%, at $92.61 a barrel.

US and Iranian negotiators in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz ⁠and Washington lifting its economic blockade of Iran, sources close to the talks said this week.

On Thursday, Iranian President Masoud Pezeshkian said it was up to the US to choose when the Iran war will end.

Since the war began at the end of February 2026, around a fifth of the world’s oil and gas shipments have been curtailed.

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“Diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks,” the chief analyst at KCM Trade, Tim Waterer, told Reuters.

On Thursday, oil prices touched a one-week high, with both contracts rising as much as 5%. For the week, Brent is up 1.7%, while WTI is down 7.2%.

The spread between ‌Brent and ⁠WTI is the widest it has been since May at $12.50 a barrel.

Fears of a United States ban on diesel exports that could flood the domestic market are largely responsible for the price bifurcation, given that the two benchmarks usually rise and fall in tandem, despite the US contract usually selling for a discount.