Oil prices rose over 2% Thursday as US-Iran talks stall and a possible diesel export ban adds pressure on energy markets.

Oil prices were mixed Wednesday, amid hopes of a diplomatic solution to the conflict in the Middle East after Iran and the U.S. had talks.

By Helen Clark PERTH, Sept 23 (Reuters) - Oil prices drifted lower on Wednesday as Saudi Arabia began restoring crude supply on a critical pipeline to the Red Sea and on hopes for a diplomatic solution to the US-Iran war through talks at the UN in New York.

While renewed escalation could push crude prices higher, confirmation of direct U.S.-Iran talks at this week’s U.N. General Assembly could weigh on prices by raising expectations for increased supply.

Oil rose Tuesday, amid concerns of growing Iran-U.S. tensions. after U.S. Treasury Secretary Scott Bessent told CNBC that all Iranian airlines will be shut down from Wednesday.

The ASX 200 fell 0.76% as rising oil prices linked to uncertainty over a US-Iran peace deal outweighed stronger Australian employment data and hopes of easing rate pressure.

Oil prices rose on Monday after Yemen's Iran-backed Houthis launched missile and drone strikes at Saudi Arabia's capital Riyadh on Saturday, escalating tension in the Middle East while the US and Iran remained in stalemate.

Oil fell Monday, as traders keep watch for a recovery in shipments from Saudi Arabia, even as Mideast tensions continue to escalate.