Saudi, Pakistani and Turkish officials meet Iran in Tehran as oil drops more than 6% from near wartime highs

Officials from Saudi Arabia, Pakistan and Turkey held security talks with Iranian officials in Tehran on Monday, Iranian and Saudi authorities said³. A Saudi official confirmed that the talks with officials from Turkey, Pakistan and Iran were taking place that day⁹.

The three countries are members of a joint defence agreement known as the Mecca Pact^4,6. Their officials were in Tehran for the talks on Monday⁵. The meeting is the first significant one between Iran and the pact’s three members⁶. The delegations met with the region on edge over the potential for renewed fighting^1,2.

Pakistan has been involved in earlier diplomacy: it helped broker an agreement in June together with Qatar². The new talks were framed as security talks³, separate from the diplomacy between Washington and Tehran that traders have been tracking⁷.

Why it matters to investors

Oil prices fell as traders weighed diplomacy between the United States and Iran against attacks on Saudi Arabia⁷. Oil dropped by more than 6% from near wartime highs as diplomacy over Iran appeared to gather pace⁸.

Physical flows have improved. Despite the continuing risks, oil shipments through the Strait of Hormuz have recovered substantially⁷. Saudi Arabia, which has itself come under attack⁷, is now part of a direct security dialogue with Tehran alongside Pakistan and Turkey^3,6.

Risks remain visible. Satellite images have shown an oil spill off the shore of the United Arab Emirates⁵, and the meetings take place against the threat of renewed fighting².

What to watch

Any statement from the Tehran talks will be read for whether the Mecca Pact states can act as a channel to Iran^4,6. Reports from the meeting have so far set out who attended rather than what was agreed^3,9.

Israel has no plan to initiate an attack on Iran before its elections, according to live coverage of the talks⁵. Traders will also watch whether attacks on Saudi Arabia continue while its officials are in Tehran⁷, and whether shipments through the Strait of Hormuz keep recovering⁷.

For markets, the oil move sits beside a crowded calendar: the European Central Bank decides on Thursday, with France’s bond turmoil in focus, the Bank of Japan on Friday, and earnings season continues⁸.