Oil prices decline as Gulf supplies increase

US President Donald Trump warned on Tuesday that he could "annihilate" Iran, but also said envoys Steve Wittkoff and Jared Kushner had held productive talks with Iranian intermediaries to end the war.

He added, "I think there is a lot of momentum to reach an agreement."

Optimism about improved supplies and efforts to end the nearly seven-month conflict caused Brent crude to settle below $100 a barrel for the first time since September 8.

Tim Waterer, senior analyst at KCM Trade, said, "The market is currently looking more positively at the prospects of global oil supply than it was a few weeks ago."

He added, "The meeting of the US and Iranian delegations in New York has given traders a glimmer of hope... Despite the continued harsh statements, including threats of annihilation, the market is counting on the possibility of talks."

Three informed sources said that Saudi Arabia resumed the operation of the (east-west) pipeline to the Red Sea on Tuesday, amid increasing signs of rising oil flows from the Middle East.

Saudi Arabia was forced to close the pipeline on September 11 due to drone attacks, which the kingdom blamed on Iraqi armed factions, halting oil loading operations at the Yanbu port.

Since the US-Israeli war with Iran disrupted oil flows from Saudi Arabia and neighboring Gulf countries through the Strait of Hormuz, the kingdom has been using the pipeline to divert about four million barrels per day, or about 4% of global supplies, to Yanbu.

Iraqi Oil Minister Bassem Mohammed said on Tuesday that the country's oil exports had increased. He said Iraq is currently exporting more than three million barrels per day, and its exports via Turkey are expected to exceed 600,000 barrels per day.