Oil prices were mixed Wednesday as traders weighed progress in U.S.-Iran diplomacy and prospects for restoring Saudi export capacity against lingering risks to Middle Eastern supplies.

In the European midmorning, Brent crude futures were up 0.4% at $99.64 a barrel, while West Texas Intermediate was down 0.4% at $90.14 a barrel.

Progress on restoring Saudi export capacity and U.S.-Iran diplomacy is unwinding part of the geopolitical premium in oil prices, according to analysts at MUFG. However, unresolved risks around the Strait of Hormuz and Red Sea shipping leave crude markets vulnerable to renewed disruptions, they said.

Saudi Arabia has begun testing its East-West pipeline for structural integrity and pressure, a step toward restoring oil flows after attacks knocked out the route earlier this month. Crude exports from the Red Sea port of Yanbu could restart within a couple of days if the tests are successful, The Wall Street Journal reported, citing people familiar with the matter.

U.S. envoy to the Middle East Steve Witkoff said in a post on X that American officials engaged in lengthy talks with the Iranian delegation through mediators on the sidelines of the United Nations General Assembly. The mediators shuttled between the two sides throughout the day and completed a round of discussions that the U.S. hopes will prove constructive and promising, he said.

President Trump said in his speech before the U.N. General Assembly that he expects Iran to reach a deal with the U.S. after the November midterm elections, adding that an agreement would send oil prices below prewar levels. Trump said he had a "big decision to make" over whether to reach an agreement that would allow Iran to rebuild or further escalate the conflict.

Qatar said it is working with Pakistan to de-escalate tensions between Iran and the U.S., safeguard freedom of navigation through the Strait of Hormuz and promote peace and stability across the region, according to the Qatari Foreign Ministry.

Attention is also turning to Trump's meeting with Chinese President Xi Jinping on Thursday. Trump could ask Beijing to help end the Iran conflict and reopen Middle Eastern shipping routes, S&P Global Energy said.

In the U.S., Trump said Tuesday that his administration is considering restricting diesel exports as soaring fuel prices put pressure on consumers. Treasury Secretary Scott Bessent said the administration is examining whether a full or partial restriction would be feasible, while Trump said a decision would come "fast, one way or the other."

The national average for a gallon of diesel reached a record high of $6.527 Tuesday, up from $5.59 a month earlier, according to the American Automobile Association.

A complete ban on U.S. diesel exports could force American refiners to cut crude runs by around 1.9 million barrels a day, or about 12% of refinery throughput, according to analysis published Tuesday by S&P Global Energy CERA. The U.S. has a diesel surplus of roughly 1.4 million barrels a day, while exports have averaged 1.5 million barrels a day so far this year, up 275,000 barrels a day from the same period last year, the analysts said.

Such a ban would be "highly disruptive" to fuel markets across the Atlantic Basin, potentially creating a domestic diesel glut while pushing global diesel prices higher, S&P Global Energy CERA analysts said. Cutting refinery runs by that amount could also reduce U.S. gasoline production by as much as 750,000 barrels a day, turning the country into a net gasoline importer in the fourth quarter, they said.