Oil prices reversed early gains on Tuesday amid optimism that prospects for a diplomatic solution to the U.S.-Iran war are improving.

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.

Oil prices extended declines on Wednesday as investors eyed improved Gulf supply after Saudi Arabia restarted operations at a critical pipeline.

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

In the four months since the leaders of the two ⁠global ⁠superpowers last met, Xi Jinping has overseen a surge in China's ⁠trade with the world while Donald Trump has struggled with falling approval ratings at home.

US Treasury secretary Scott Bessent said the two sides had negotiated the creation of an AI dialogue mechanism, which was floated when Trump met Xi in Beijing in May, in talks with Chinese vice-premier He Lifeng in New York on Sunday.

Treasury Secretary Scott Bessent outlines trade and AI engagement with Chinese officials. U.S. Trade Representative Jamieson Greer highlights the relationship between the two nations ahead of the upcoming summit.

U.S. President Donald Trump and China's leader Xi Jinping are expected to meet in Washington this week as competition over the technology intensifies.