US-Iran diplomacy remains deadlocked. At the UN General Assembly, Trump defended the war and mused about "annihilating the Islamic Republic", while President Pezeshkian demanded an end to the US blockade and defended Iran's civilian nuclear programme. Sideline talks, the first since June, yielded nothing new. Trump then rejected an Iranian proposal to reopen the Strait of Hormuz within seven days, and officials said he had told staff another bombing campaign was likely. Brent rose to USD 108.25 per barrel on Monday morning before easing to USD 104.54 per barrel once Saudi loadings resumed at Yanbu. It is heading for a monthly gain of 14 per cent, against 5.6 per cent for WTI.
On supply, the US Strategic Petroleum Reserve has fallen to 284.6 Mn barrels, its lowest since 1982, following a 172 Mn-barrel release in March. The White House says that Venezuelan barrels could refill it, but this requires substantial investment first. EU electric vehicle registrations jumped 62.7 per cent year on year in August amid record fuel prices. Battery EVs took 27.7 per cent of new registrations. Views differ on whether the trend will outlast subsidies.
Downstream, Trump has floated a US diesel export ban. US Gulf refiners are running near full utilisation, and the EU sources 32 per cent of its diesel from the US, so a ban could push prices even higher. However, Energy Secretary Chris Wright's opposition and the upcoming midterms make it unlikely.