Oil prices staged a rebound Wednesday, pulling up from a five-session losing streak as investors weighed the prospect of improved Saudi export flows and U.S.-Iran diplomacy against the potential for further disruptions.
Brent crude futures rose 3.9% to $103.08 a barrel and West Texas Intermediate settled up 1.8% at $92.16 a barrel. Prices had fallen the previous five sessions as the market became more optimistic about the amount of oil making it out of the Middle East and diplomatic efforts to bring the U.S. and Iran back to the negotiating table.
U.S. envoy to the Middle East Steve Witkoff said in a post on X that American officials engaged in lengthy talks with the Iranian delegation through mediators on the sidelines of the United Nations General Assembly in New York. The mediators shuttled between the two sides throughout the day Tuesday and completed a round of discussions that the U.S. hopes will prove constructive and promising, he said.
President Trump said in his speech before the U.N. General Assembly on Tuesday that he expects Iran to reach a deal with the U.S. after the November midterm elections. Trump said he had a "big decision to make" over whether to reach an agreement that would allow Iran to rebuild or further escalate the conflict.
Iranian President Masoud Pezeshkian addressed the assembly Wednesday, where he said Iran is ready for negotiations to end the conflict, but that Tehran wouldn't allow itself to be bullied by the U.S. or give up its nuclear program.
Qatar said it is working with Pakistan to de-escalate tensions between Iran and the U.S., safeguard freedom of navigation through the Strait of Hormuz and promote peace and stability across the region, according to the Qatari Foreign Ministry.
Attention is also turning to Trump's meeting with Chinese President Xi Jinping on Thursday. Trump could ask Beijing to help end the Iran conflict and reopen Middle Eastern shipping routes, S&P Global Energy said.
In the U.S., the market was focused on the possibility of a diesel export ban after Trump said Tuesday that his administration is considering restricting exports as soaring fuel prices put pressure on consumers. Treasury Secretary Scott Bessent said the administration is examining whether a full or partial restriction would be feasible, while Trump said a decision would come "fast, one way or the other."
The American Automobile Association reported the average U.S. retail diesel price at $6.5217 a gallon Wednesday, down marginally from Tuesday's record high $6.5276 a gallon. Diesel futures traded on the New York Mercantile Exchange fell 3.4% to $4.7764 a gallon.
A complete ban on U.S. diesel exports could force American refiners to cut crude runs by around 1.9 million barrels a day, or about 12% of refinery throughput, according to analysis published Tuesday by S&P Global Energy CERA. The U.S. has a diesel surplus of roughly 1.4 million barrels a day, while exports have averaged 1.5 million barrels a day so far this year, up 275,000 barrels a day from the same period last year, the analysts said.
Such a ban would be "highly disruptive" to fuel markets across the Atlantic Basin, potentially creating a domestic diesel glut while pushing global diesel prices higher, S&P Global Energy CERA analysts said. Cutting refinery runs by that amount could also reduce U.S. gasoline production by as much as 750,000 barrels a day, turning the country into a net gasoline importer in the fourth quarter, they said.
