Oil prices rebounded on Wednesday after Tuesday's sharp selloff, as Saudi Arabia restored crude flows through its East-West Pipeline and resumed loadings at the Red Sea port of Yanbu. Traders remain focused on the Strait of Hormuz, effectively closed since the U.S. and Israel launched their joint assault on Iran in late February.
Oil prices turned higher on Wednesday, rebounding after a sharp fall in the previous session, as investors weighed signs of recovering Middle East exports against lingering concerns over disruptions to shipments through the Strait of Hormuz.
Brent and WTI recover after Tuesday's slide
As of 05:06 ET (09:06 GMT), Brent crude futures rose 1.0% to $103.64 per barrel, while WTI crude gained 0.9% to $90.21 per barrel. On Tuesday, Brent had settled down 2.6%, while WTI dropped 3.5%.
Saudi Arabia reopens an alternative export route
The latest pressure on prices came from Saudi Arabia's resumption of crude loadings at its Red Sea port of Yanbu, after the restart of its East-West Pipeline provided an alternative route bypassing the Strait of Hormuz. Saudi Aramco has notified customers of its October loading schedule, and shipping data showed, according to a Reuters report, nearly 10 million barrels of crude being loaded at Yanbu and nearby Al Muajjiz. Bloomberg reported, citing people familiar with the matter, that Saudi Arabia restored flows through its East-West pipeline to at least 3.5 million barrels per day, around half of its capacity.
The recovery has reduced some of the immediate supply risk from the conflict, but the Strait of Hormuz remains a key uncertainty. The waterway has been effectively closed since shortly after the U.S. and Israel began their joint assault on Iran in late February, and diplomatic efforts to reopen it have yet to produce a breakthrough. According to Deutsche Bank: "still pricing in a lengthier period of disruption", even as increased flows out of the Gulf have eased near-term pressure.
Qatar mediates as Trump weighs a diesel export ban
Qatar is mediating between Washington and Tehran, with talks focused on an agreement that could include reopening the Strait of Hormuz and easing some U.S. pressure on Iran. President Donald Trump has rejected reports that Washington offered Tehran sanctions relief, while Iran continues to push for conditions linked to reopening the strait.
Separately, a Financial Times report showed Trump is considering a range of measures, including a possible diesel export ban, to curb surging domestic fuel prices as a worsening energy crisis raises political pressure on his administration. U.S. diesel prices reached $6.53 a gallon last week, more than 70% above their prewar level.
Source: Commodities & Futures News
Trading involves risk.
Risk Disclaimer
