Oil prices rise for second session on continued Middle East supply concern

"A clearer picture is emerging of higher oil export volumes leaving ​the Gulf, but much of that increase still relies on workarounds such ⁠as ship-to-ship transfers. Those methods are less efficient and more costly than normal operations, which ​is why crude prices remain elevated," said KCM Trade chief analyst Tim Waterer.

Crude exports from major ​Middle Eastern producers climbed to 12.8 million barrels a day in September, the highest since February, preliminary figures from data provider Kpler showed on Monday, helped by increased shipments from Saudi Arabia and the ​United Arab Emirates.

US and Iranian officials spoke separately with mediators in a renewed effort to end ​seven months of war, officials of both countries said. Further talks are widely expected to focus on ‌an ⁠amended version of a seven-day proposal that Iran presented last week on the sidelines of the United Nations General Assembly.

"The dominant risk remains the US-Iran standoff and its implications for energy prices and inflation expectations," said UOB analysts in a client note. "Iranian officials have reportedly ​expressed pessimism about reaching ​a deal before the ⁠Strait of Hormuz situation escalates further, keeping oil supply uncertainty elevated.

"The war, which began in late February with US and Israeli attacks on ​Iran, has focused attention on the Strait of Hormuz, a crucial ​shipping lane ⁠for oil and gas supplies, the disruption of which has upended energy markets.

Meanwhile, the US is considering regulatory relief to allow broader sales of red-dyed diesel to help lower prices, action ⁠that could ​allow some buyers to avoid federal fuel tax, people ​familiar with discussions. The proposal emerged from days of deliberation as a leading alternative to a diesel export ​ban.