Oil prices have declined for a second consecutive session, with the domestic SC crude contract experiencing a sharp drop on Thursday as the final holding day for near-month contracts approached. The previously overheated sentiment has cooled rapidly, with adjustment demand beginning to dominate price action. Reports indicate Saudi Arabia is accelerating repairs on its East-West pipeline while deploying various measures to boost exports through the Strait of Hormuz, aiming to minimize export losses. This has eased market concerns, while traders also monitor diplomatic efforts to de-escalate Middle East tensions. Following the recent price surge, the US has notably avoided escalating confrontation with Iran and its allies, and these developments have helped alleviate market anxiety, with prices gradually retreating after Monday's spike.

Trump stated in an interview that he is at a critical crossroads regarding Iran, needing to decide whether to restart large-scale military operations to end the conflict. Trump plans to meet with leaders from Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, and Oman next Tuesday on the sidelines of the UN General Assembly in New York, focusing on US post-war strategic concepts and determining whether to pursue diplomatic negotiations or escalate military action. If Trump decides to resume large-scale operations, he would need support from regional allies — a prospect that appears difficult to achieve given recent Middle East dynamics, as Gulf nations are reluctant to confront Iran.

Market anxiety had reignited last week, driving a broad surge in spot premiums and tanker freight rates across the global crude market — an overheated performance that will inevitably harm demand recovery. The market's self-adjustment mechanism is gradually taking effect. The mutual maximum pressure tactics between the US and Iran are primarily aimed at forcing the other side to compromise, with the ultimate goal of reaching a mutually acceptable agreement rather than escalating into war. With Trump signaling a major decision, next week could prove pivotal for the crude market. Until then, oil markets are entering a waiting period. Given the prospect of geopolitical de-escalation, funds will be cautious about pushing prices higher during this phase. With high volatility expected, risk management remains essential.

Daily Market Data

WTI crude futures fell $0.52, or 0.51%, to $101.91 per barrel. Brent crude futures declined $1.01, or 0.95%, to $104.82 per barrel. INE crude futures dropped 5.28% to 762.5 yuan. The US dollar index slipped 0.1% to 100.23. The Hong Kong Stock Exchange's USD/CNY rate rose 0.02% to 6.6649. US 10-year Treasury yields gained 0.58% to 106.28. The Dow Jones Industrial Average advanced 0.61% to 51,778.04.

Middle East Supply Disruption May Ease, Oil Extends Decline

Signs are emerging that Middle East supply disruptions could ease, with Saudi Arabia working to restore partial capacity on a key pipeline, sending oil prices lower. Brent crude fell 2.7% on Wednesday to trade near $102 per barrel, while West Texas Intermediate dipped below $100. Following last week's drone attack on the East-West pipeline, the kingdom plans to restore roughly half of its throughput capacity within days. Meanwhile, Saudi Arabia has sold additional crude to Asian refiners with delivery points outside the Strait of Hormuz. Risks remain, however, including US-Iran conflict disrupting regional energy flows and the ongoing Russia-Ukraine war. Traders are also monitoring Yemen's Houthi militants, who are advancing toward the strategic Bab el-Mandeb Strait at the southern Red Sea while continuing attacks on Saudi oil facilities and shipping assets. Oil fell further on Thursday amid reports of a potential truce. Arne Lohmann Rasmussen, chief analyst at Copenhagen-based Global Risk Management, noted that partial restoration of the East-West pipeline, combined with ship-to-ship transfers of Saudi crude outside Hormuz, is bearish for crude in the near term. However, he cautioned that as long as the Houthi conflict persists, markets cannot afford to relax. According to Lebanon's Al-Akhbar newspaper, Saudi Arabia has requested Omani mediation to broker a two-week ceasefire with the Houthis, during which humanitarian demands would be discussed, with an agreement expected before week's end.

US Media: Trump to Hold Iran Talks With Gulf Leaders Next Week

Axios reports, citing three informed sources, that Trump is expected to meet with Gulf leaders or foreign ministers — including Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, and Oman — next Tuesday during the UN General Assembly in New York to discuss next steps regarding the Iran conflict. The meeting is expected to focus on US post-war strategic concepts, with Trump and his senior team developing a plan expected to be finalized after the midterm elections. One source indicated the meeting could expand to include other Arab and Muslim leaders. An Israeli source said Prime Minister Netanyahu hopes to meet Trump in New York as well, though no meeting has been arranged. Trump said Wednesday he hopes the war is near its end, reiterating that Iran wants a deal and that the US has heard this directly from Tehran.

US House Passes Russia Sanctions Bill, Sends to Trump for Signature

The US House of Representatives passed legislation on September 17 with a vote of 262-159, imposing sanctions and tariffs on Russia, sending the bill to Trump for signature. The measure aims to pressure the Russian economy to compel Putin to end the Ukraine conflict. Sanctions target Russian officials, companies, and financial institutions supporting the war effort. The bill also authorizes the president to impose tariffs on major countries importing Russian oil and gas. The tariff authority has become a sticking point for many Democrats opposing the bill, who worry Trump could gain new leverage to impose tariffs on countries of his choosing. Virginia Democratic Representative Don Beyer stated the bill contains a loophole allowing the administration to define virtually any country as assisting Russian sanctions evasion, then apply tariffs up to 100% without guardrails, oversight, or expiration dates.