Oil prices started the week with a sharp drop amid a halt in mutual shelling and the resumption of talks between the US and Iran

Amid 13 days of US airstrikes on Iran and attacks on two Saudi oil tankers in the Red Sea, oil prices rose 20% during the week, but fell on Friday as traders began to book profits, given the continued supply of oil from the Red Sea.

September Brent crude futures, after reaching a 2-month high of $102/barrel on Thursday, fell 3.7% to $97/barrel on Friday (+31% for the month).

Traders expected the US to step up its attacks on Iran over the weekend, but the attacks stopped on Saturday after reports emerged that delegations from Oman and Pakistan would hold talks with Iran over the weekend.

Later on Sunday, Iran confirmed to Pakistan its readiness to continue talks with the US in Geneva, Doha or Islamabad, in accordance with the memorandum of understanding. According to the Al Arabiya source, Iran seeks to resume talks first on the Strait of Hormuz, then on its frozen assets and finally on its nuclear program, but it rejects the creation of a new corridor through the Strait of Hormuz.

On Monday morning, at the opening of Asian markets, oil prices fell by 4.5% to $93/barrel on expectations of an end to shelling and the resumption of oil supplies from the Middle East.

However, the fall in prices will be limited by the news of the mine explosion in the Strait of Hormuz of another oil tanker, which, according to the Iranian news agency Tasnim, was moving outside the IRGC's established route.

We expect prices to stabilize at around $90/barrel as Iran will continue to drag out negotiations, demanding control over the Strait of Hormuz, and the US will not resume strikes because Saudi Arabia does not want the conflict to escalate and is taking diplomatic steps to stop the shelling, especially after the Houthis' strikes on tankers and the attack on Saudi Aramco's oil facilities in the cities of Jizan and Yanbu on the Red Sea coast.