Oil erases losses after Trump says Iran war could be settled after midterms

Oil prices erased sharp drops from earlier Tuesday after President Donald Trump said at the United Nations that he believes he can reach a deal with Iran to end the war after November’s midterm elections. Earlier on Tuesday, U.S. crude oil had fallen as much as 3.5% to as low as $92.40 per barrel, while Brent oil had fallen 3% to as low as $97.43. But after the president’s speech, those drops were largely erased. By the time Trump finished, U.S. crude oil was trading around $96 and Brent had briefly turned positive and rose above $100 per barrel again. “I believe we will make a deal right after the election because it does not make sense for them not to,” he told the United Nations General Assembly. “Oil prices will come plummeting down, even lower than they were at the start of the conflict.” Experts doubt that. At the beginning of the month, multiple Wall Street commodities analysts warned that oil prices could rise to $120 or even $150 per barrel if the Iran war drags on and more energy infrastructure is damaged. Still, oil prices are being held down from surging even further by reports earlier Tuesday that Iran was offering to reopen the Strait of Hormuz within days if the U.S. takes steps toward easing pressure on the country. NBC News has not confirmed the reports. Iran’s semiofficial Fars news agency said that “Iranian sources have described these reports as unreliable and untrue,” without naming those sources. Trump is holding a number of meetings with world leaders Tuesday at the United National General Assembly in New York City, including with Gulf Cooperation Council leaders on Tuesday night. On Sunday, Trump signaled a willingness to meet with Iranian President Masoud Pezeshkian. Asked about a potential meeting between the two leaders, Secretary of State Marco Rubio told NBC News on Tuesday morning, “I don’t think anything is scheduled at this point.” Rubio added that the U.S. was “open to something like that,” though. Since the U.S. and Israel launched the Iran war Feb. 28, vessel traffic through the Strait of Hormuz has at times ground to a near halt. Over the course of the last week, daily traffic did not exceed 20 ships in a day, according to data from MarineTraffic. Also helping to keep a lid on prices Tuesday were reports about Saudi Arabia’s key east-west pipeline, which has effectively acted as a Strait of Hormuz workaround for oil exports. On Sept. 11, the Saudi Energy Ministry said that the pipeline was shut after “multiple attacks” on it amid the escalating conflict with the Iran-backed Houthi rebels. Initially, experts worried that this closure could last months. Reuters reported that the pipeline had already restarted, and could resume exports from a Red Sea port later in the day, citing three people familiar with the matter. Bloomberg News reported that Saudi Arabia was running tests on the pipeline with the hope of restarting it this week, citing multiple people familiar with the matter. Saudi Aramco, which operates the pipeline, did not immediately respond to a request for comment from NBC News. On NBC’s “TODAY,” Rubio said regarding prices, “if you look at the increases we’ve seen in just the last two weeks, the enormous majority of that increase is because the Houthi’s attacked a Saudi pipeline and the Saudis had to shut down that pipeline.” “So there’s still oil in the system, but the markets are reacting to the expectation that there will not be as much Saudi oil in the future” as a result of the pipeline attack, Rubio added. “That is problem as well, which we are confronting here.” Both oil benchmarks are elevated by more than 60% since the start of the year. So are retail gas prices, which as of Tuesday morning reached $4.47 per gallon. That’s up 50% since the Iran war began. The price of diesel has also skyrocketed. The national average hit a new all-time high of $6.52 per gallon Tuesday, up 82% since the start of year on a record run propelled in part by intensifying aerial attacks between Russia and Ukraine. Trump is set to hold talks with Ukrainian President Volodymyr Zelenskyy on Tuesday as he pushes for an energy truce. Along with tumbling oil prices, bond yields also fell early Tuesday. The 10-year U.S. Treasury yield, which heavily influences consumer borrowing rates, fell to as low as 4.92%, after reaching as high as 5.04% a week ago. That was its highest level since 2007. The 30-year Treasury yield also dipped to as low as 5.25% Tuesday morning. Last week, it rose as high as 5.4%, a level it also last touched in 2007. Global stocks rose on the optimsim. The European-wide Stoxx 600 index rose more than 0.5%, as did Germany’s benchmark DAX and France CAC 40 indexes. In early U.S. trading, the S&P 500 was flat, while the Nasdaq Composite rose 0.3%. Those moves came after both indexes posted their best days since August on Monday, driven by falling oil prices and bond yields. The Dow was down by roughly 250 points as of late Tuesday morning.