WTI falls to near $93.50 as Middle East diplomacy hopes ease supply fears

West Texas Intermediate (WTI) oil price continues its losing streak for the fourth successive day, trading around $93.60 per barrel during the Asian hours on Monday. Crude oil prices fell on growing hopes that increased diplomatic efforts could help end the Middle East conflict and restore stable energy flows from the region.

A significant factor behind this optimism is US President Donald Trump stating he would "probably" be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York this week. Alongside this potential encounter, Trump may meet with other Persian Gulf leaders and is scheduled to hold a summit with Chinese President Xi Jinping.

Adding to the diplomatic momentum, Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani urged Gulf states to cooperate in restoring regional stability, noting that active messages are currently being exchanged between the US and Iran.

Reflecting these easing tensions on the ground, US Central Command chief Admiral Brad Cooper reported that oil and liquefied natural gas shipments through the Strait of Hormuz over the past two weeks have reached their highest level in six months.

Oil pass-through seen limited as higher fuel costs squeeze margins

Economists at Royal Bank of Canada highlight that the recent rise in energy prices has not yet translated into a broad-based inflation surge. According to RBC, “evidence of pass-through to broader inflation has been limited so far,” and they “expect the impact in coming months will remain constrained as higher fuel costs erode margins across business supply chains before reaching final consumer prices.”