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Crude oil prices extended their decline on Tuesday, with Brent crude slipping below $100 a barrel for the first time in nearly two weeks as traders bet that Saudi Arabia could quickly restore disrupted export infrastructure and avoid a major supply shock.

Both Brent and West Texas Intermediate (WTI) futures were down about 2%, continuing a sell-off that has reversed much of the risk premium built into the market after attacks on Saudi energy infrastructure earlier this month. Brent had climbed as high as $108.94 per barrel on 10 September before retreating.

The decline has been driven by reduced fears of an immediate escalation in the Middle East and reports suggesting Saudi Arabia may restore flows through its East-West pipeline within days.

According to reports by The Wall Street Journal, citing people familiar with Saudi Aramco operations, repairs to the East-West pipeline and a partial restoration of exports through the Red Sea could be achieved within days. Even with the pipeline and Yanbu export terminal affected, Saudi Arabia has continued to ship substantial volumes through the Strait of Hormuz.

Analysts say the Kingdom's ability to maintain exports has eased concerns about a prolonged supply disruption.

"The ongoing drop in crude prices comes amid a lull in Middle East escalation, alongside optimism about the potential restoration of Saudi exports through the Red Sea within days," said Samer Hasn, Senior Market Analyst at XS.com.

Market sentiment has also been supported by speculation that Washington and Tehran could resume diplomatic engagement. Investors are watching for any signs of talks between U.S. President Donald Trump and Iranian President Masoud Pezeshkian during events surrounding the United Nations General Assembly in New York.

Hasn said expectations of renewed negotiations have encouraged traders to reduce geopolitical risk premiums in oil markets.

However, he cautioned that underlying risks remain elevated.

"We remain stuck in a grey state represented by a formula of neither peace nor war," Hasn said. "The energy market on the ground remains largely disrupted amid high risks of renewed escalation."

The analyst noted that rerouting more Saudi crude through the Strait of Hormuz could increase vulnerability to future attacks and add to already elevated shipping costs. Maritime security concerns also persist, with reports of continued incidents involving vessels in the strategic waterway.

Shipping expenses have soared in recent weeks as tanker operators demand higher premiums to navigate the Gulf region. According to data cited by industry reports, charter rates for some supertankers exceeded $1 million per day earlier this month.

Hasn also warned that prospects for a lasting diplomatic breakthrough between the United States and Iran remain uncertain, arguing that neither side appears willing to offer significant concessions in the near term.

As a result, he expects oil markets to remain highly volatile in the coming weeks.

"The likely scenario is the continued dominance of the current grey state, which reflects very wide sideways paths for crude prices, consisting of sharp rises followed by sharp drops," he said.

Still, he warned that any escalation targeting oil production, export facilities or refining infrastructure across the region could quickly reverse the latest price decline and send crude prices sharply higher again.

For now, however, hopes of restored Saudi export capacity and renewed diplomatic engagement have outweighed immediate supply concerns, pushing benchmark crude prices lower and easing fears of a prolonged disruption to global oil markets.