RoydadNaft –  Brent crude futures fell 78 cents, or 0.79%, to $98.47 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.21, or 1.34%, to $89.31 a barrel.

Oil prices extended their declines on Wednesday as investors focused on improving supplies from the Gulf region after Saudi Arabia resumed operations on a critical oil pipeline.

Hopes for a diplomatic solution to the U.S.-Iran war also weighed on oil prices.

Brent crude futures fell 78 cents, or 0.79%, to $98.47 a barrel as of 6:51 a.m. GMT, while U.S. West Texas Intermediate futures fell $1.21, or 1.34%, to $89.31 a barrel.

Both benchmarks have declined for six consecutive sessions and are now trading around two-week lows.

U.S. President Donald Trump warned on Tuesday that he could “annihilate” Iran, but also said his envoys, Steve Witkoff and Jared Kushner, had held productive talks with Iranian mediators aimed at ending the war.

“I think there’s a lot of momentum for them to make a deal,” Trump said.

Optimism over improved supplies and efforts to end the nearly seven-month conflict pushed Brent crude below $100 a barrel at Tuesday’s close for the first time since September 8.

“The market is currently feeling more constructive about the global oil supply picture than it was a few weeks ago,” said Tim Waterer, chief analyst at KCM Trade.

“The meeting of U.S. and Iranian delegations in New York has given traders a glimmer of hope. Despite the continued tough rhetoric, including threats of ‘annihilation,’ the market is choosing to price in the possibility of talks,” he said.

Saudi Arabia resumed operations on its East-West oil pipeline to the Red Sea on Tuesday, three sources familiar with the matter said, with signs of increased oil flows from the Middle East.

Drone attacks, which Saudi Arabia has blamed on Iraqi militias, had forced the kingdom to shut the pipeline on September 11, halting crude loadings at the kingdom’s Yanbu port.

Since the U.S.-Israeli war with Iran disrupted oil flows from Saudi Arabia and other Gulf producers through the Strait of Hormuz, Riyadh has been using the pipeline to reroute around 4 million barrels per day, or about 4% of global oil supply, to Yanbu.

Saudi Arabia also offered more crude to Asian refiners on Tuesday for loading from locations outside the Strait of Hormuz.

Iraq is also increasing its oil exports, Iraqi Oil Minister Basim Mohammed said on Tuesday. The country is exporting more than 3 million barrels per day and expects to increase exports through Turkey to more than 600,000 barrels per day, he said.

Preliminary data from ship-tracking firms Vortexa and Kpler put Iraqi crude exports in August at 2.3 million and 2.17 million barrels per day, respectively. Both figures were higher than July levels but remained below pre-war February levels of 3.7 million and 3.362 million barrels per day, respectively.

Adding to downward pressure on oil prices, industry data showed that U.S. crude inventories rose by 1.8 million barrels in the week ended September 18. Analysts polled by Reuters had expected inventories to decline.

Official weekly inventory data from the U.S. Energy Information Administration is due at 10:30 a.m. ET (1430 GMT).

Trump said on Tuesday that he supported the idea of banning diesel exports as a way to lower prices, which have hit record highs amid a global supply shortage.

However, analysts and market watchers have warned that such a measure would do little to ease high energy prices and could worsen supply and economic disruptions around the world.