Oil prices reduced some of their earlier gains on Monday after President Donald Trump said the United States remained open to the possibility of reaching a deal with Iran.
Crude prices had climbed sharply earlier in the session as fresh Houthi attacks on Saudi Arabia and delayed diplomatic talks raised concerns about prolonged disruptions to Middle East energy supplies.
Oil Prices Pull Back From Session Highs
Brent crude futures for November delivery were up around 2.6% at $107.35 per barrel after reaching an intraday high of $109.74.
U.S. West Texas Intermediate crude futures for October gained roughly 2.4% to $102.53 per barrel after earlier climbing as high as $104.91.
The pullback followed comments from Trump suggesting that Washington could consider negotiations with Tehran.
Trump Signals Openness to Iran Deal
Trump said Iran was seeking an agreement and indicated that the United States was open to the idea of renewed engagement.
His remarks reduced some of the geopolitical risk premium that had pushed oil prices higher earlier in the day.
However, uncertainty remains high as the conflict continues to affect major shipping routes and energy infrastructure across the Middle East.
Houthi Advances Raise Red Sea Concerns
The Associated Press reported that Iran-backed Houthi forces in Yemen had taken control of additional strategic islands in the southern Red Sea.
According to the report, fighters were deployed to Greater Hanish and Lesser Hanish.
The islands are located roughly 160 kilometers north of the Bab el-Mandeb Strait, one of the world’s most important maritime trade routes.
Bab el-Mandeb Becomes Key Oil Market Risk
The Bab el-Mandeb connects the Red Sea with the Gulf of Aden and has become an increasingly important flashpoint in the wider Middle East conflict.
Around 12% of global trade passes through the strait, making any disruption significant for international shipping and energy markets.
The Houthis have already expanded their control over sections of Yemen’s Red Sea coastline, strengthening their influence around the corridor.
Saudi Oil Infrastructure Comes Under Pressure
The conflict has also spread into Saudi Arabia.
Houthi forces have launched drone attacks against targets in southern Saudi Arabia, increasing concerns about the security of the kingdom’s energy infrastructure.
The attacks contributed to the temporary closure of Saudi Arabia’s key East-West oil pipeline.
The pipeline provides an important alternative route for crude exports when shipments through the Strait of Hormuz are disrupted.
Pipeline Shutdown Threatens Global Oil Supply
Oil traders are closely watching how quickly the Saudi pipeline can return to operation.
Some market participants have warned that a prolonged shutdown could remove a meaningful share of global oil supply from the market.
Saudi Arabia relies on the route to move crude toward Red Sea export terminals, particularly when Persian Gulf shipping faces disruption.
ANZ analysts said the loss of that alternative export route could place further upward pressure on oil prices if conditions around the Strait of Hormuz worsen.
Houthi Attacks Add to Regional Tensions
The Houthis have also claimed responsibility for a large-scale military operation targeting Saudi Arabia’s King Khalid Air Base.
These developments have increased concerns that the conflict could continue spreading across the region.
For oil markets, the main risk is that attacks on pipelines, ports or shipping routes could further reduce available supply.
Iran-Gulf Talks Postponed
Diplomatic efforts also suffered a setback over the weekend.
Oman’s foreign minister said that a regional meeting between Iran and Gulf countries, originally scheduled for Monday, had been postponed.
The planned talks had previously helped ease oil prices because investors hoped diplomacy could reduce the risk of further supply disruptions.
Saudi Arabia Requested Delay, Iran Says
A spokesperson for Iran’s Foreign Ministry said the meeting in Muscat was postponed at Saudi Arabia’s request.
Tehran also denied playing any role in the conflict in Yemen.
The delay nevertheless reduced expectations of near-term de-escalation.
Strait of Hormuz Traffic Remains Restricted
Shipping through the Strait of Hormuz remains heavily constrained.
Oil flows through the route have fallen sharply compared with levels before the current conflict escalated.
Before the disruption, roughly one-fifth of global oil and liquefied natural gas supplies passed through the strait.
That makes the channel one of the most important energy transport routes in the world.
Oil Market Remains Highly Sensitive to Diplomacy
Analysts at ING said the delay in diplomatic talks pushes the possibility of de-escalation further into the future.
For now, oil prices remain caught between two competing forces.
On one side, supply disruptions, military attacks and restricted shipping are supporting prices.
On the other, Trump’s comments about a possible Iran deal have raised hopes that diplomatic progress could eventually reduce geopolitical risks.
The direction of crude prices will likely depend on whether negotiations resume and whether key Middle East shipping and pipeline routes return to normal.
