Oil prices fell for a fourth consecutive session Monday as improving flows through the Strait of Hormuz and prospects for renewed diplomacy over the Iran conflict eased immediate supply concerns.

Brent crude futures fell 3.4% to $100.34 a barrel, and West Texas Intermediate dropped 4.5% to $95.78 a barrel, their lowest closes since Sept. 8.

Improving traffic through the Strait of Hormuz and renewed diplomatic efforts are reducing the geopolitical risk premium in oil prices, MUFG said. Still, Saudi export constraints and continued security risks around the Red Sea leave the market vulnerable to further supply disruptions.

Profit-taking after recent gains and hopes for constructive discussions at this week's U.N. General Assembly have also improved market sentiment, ING analysts said. However, Saudi supply disruptions continue to tighten the European market, with some North Sea crude grades trading at steep premiums to benchmark prices, the analysts said.

"Crude oil is tanking on the possibility that President Trump and Iranian President Pezeshkian could meet at the United Nations as early as tomorrow," Robert Yawger, commodity specialist at Mizuho Securities USA, said in a note. "I think the chances of a deal getting done are better than they were at the end of last week."

Worries over prolonged disruptions to Saudi Arabia's East-West Pipeline have also eased. Saudi Aramco could partially restart the pipeline within days, The Wall Street Journal reported, citing people familiar with the company's operations. Technical hurdles remain, and Aramco has warned some European and Asian customers of possible delays or cancellations of deliveries for September and October, the people said.

The pipeline carries crude from Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu, providing an alternative export route when flows through the Strait of Hormuz are constrained.

With the pipeline impaired, Saudi Arabia is increasingly relying on its Persian Gulf export terminals to keep crude moving through Hormuz. Saudi oil loadings from the Persian Gulf have risen by nearly 2 million barrels a day to 2.46 million barrels a day so far this month, while ship-to-ship volumes from the Gulf of Oman have increased by 1.1 million barrels a day from August to 2.5 million barrels a day, according to data and analytics firm Kpler.

Ship-to-ship transfers allow crude to be carried on shorter shuttle runs through Hormuz before being transferred off Oman to tankers headed to global markets, limiting the need for long-haul vessels to enter the Persian Gulf. But Fujairah in the United Arab Emirates and Sohar in Oman, which handle most transfers in the region, are believed to be operating at or close to capacity, Kpler said.

The rerouting is also straining tanker availability. Around 15% of the global fleet of very large crude carriers is now off Oman, according to Clarksons Research. Tanker freight rates have climbed sharply as vessels are tied up in shuttle operations and longer voyages, with Clarksons previously reporting record crude-tanker rates as Middle East shipping disruptions intensified.

Despite those strains, the broader crude market isn't running out of oil, said Norbert Ruecker, head of economics and next-generation research at Julius Baer. Increased flows through Hormuz and other routes have helped compensate for disruptions to the East-West Pipeline and the Bab al-Mandeb Strait, while lower demand has helped keep the global market roughly balanced since the summer, he said.

Uncertainty has eased since the pipeline attack and lowered his three-month oil-price forecast to $77.50 a barrel, while maintaining a 12-month forecast of $60 a barrel, Ruecker said.

Still, he said oil prices continue to carry a persistent premium reflecting the risk of further supply disruptions.

While crude prices have eased, tightness remains in fuel markets. The U.S. national average price of diesel rose to a record $6.51 a gallon Monday, from $3.696 a gallon a year earlier, according to the American Automobile Association. Diesel futures traded on the New York Mercantile Exchange fell 3.3% to $4.8895 a gallon.

Security risks around Saudi Arabia remain elevated following another round of Houthi attacks over the weekend. Saudi air defenses destroyed ballistic missiles targeting Riyadh and other cities, according to the Saudi Press Agency.

An airborne attack separately hit jet-fuel facilities at King Khalid International Airport in Riyadh, The Wall Street Journal reported, citing three officials with knowledge of the incident. The Houthis later claimed attacks on Riyadh and Yanbu, the WSJ reported.

The security situation is also complicating Saudi shipments from the Red Sea. More than a dozen Saudi-flagged vessels have rerouted around South Africa's Cape of Good Hope rather than transit the Bab al-Mandeb Strait, adding around $1 million to the cost of each voyage, according to maritime intelligence firm Windward.

The disruptions come as the availability of alternative routes remains critical to Saudi exports. With Fujairah and Sohar already close to their practical ship-to-ship transfer limits, according to Kpler, further increases in Gulf exports could require more cargoes to sail directly to Asian destinations or use less-efficient transfer locations farther east.