Oil prices remained close to their lowest levels in more than two weeks on Wednesday as traders assessed additional Gulf supplies, U.S. inventories and diplomatic developments involving Iran.
Brent crude futures were up 0.16%, or 16 cents, at $99.41 a barrel at 08:09 GMT. West Texas Intermediate futures declined 0.55%, or 50 cents, to $90.02.
Brent reached $97.36 during the previous session, its lowest price since September 8. WTI fell to its lowest level since September 1 earlier on Wednesday.
The market was also monitoring U.S.-Iran diplomatic contacts after President Donald Trump said his representatives had participated in discussions involving mediators for Iran that he characterised as productive.
East-West Pipeline Returns to Operation
Changes in Middle East crude availability have also contributed to the oil market’s focus on supply.
Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, according to three sources cited by Reuters.
The pipeline had been closed on September 11 after drone attacks, interrupting crude loadings at the Red Sea port of Yanbu.
The route has been used to redirect approximately 4 million barrels per day of Saudi crude to Yanbu following disruptions to shipments through the Strait of Hormuz. That volume is equivalent to around 4% of global oil supply.
Saudi Arabia has also offered additional barrels to Asian refiners for loading from locations outside the Strait of Hormuz.
Iraq is increasing exports at the same time. Its oil minister said the country was shipping more than 3 million barrels per day and expects exports through Turkey to rise above 600,000 barrels per day.
Hormuz Developments Add to Supply Focus
The market is also assessing the possibility of renewed commercial traffic through the Strait of Hormuz.
A senior Iranian official told Reuters that the Strait could reopen within seven days if the United States eased military pressure and lifted its blockade of Iranian ports.
WisdomTree commodity strategist Nitesh Shah said diplomatic developments were among the factors affecting crude prices.
“Trump is trying to give off strong vibes of good talks … so that’s possibly something driving down oil prices,” Shah said. “But I’d caution that things could change quite abruptly back into positive price moves.”
U.S. Crude Inventories Increase
Industry figures showed U.S. crude inventories increased by 1.8 million barrels in the week ended September 18, contrasting with expectations among analysts surveyed by Reuters for a decline.
Official inventory data from the U.S. Energy Information Administration are due later on Wednesday.
Despite additional crude reaching the market, Kpler head of market engagement Matt Stanley said supply conditions for some refined products remained constrained.
“A bit more crude is finding its way into the market and the East-West pipeline returning is giving everyone some breathing space. But the products problem hasn’t gone away. Diesel is tight. Jet fuel is tight. And increasingly it’s the end user who is going to start feeling this,” Stanley said.
Diesel Export Restrictions Considered
President Trump said on Tuesday that he supported the idea of restricting U.S. diesel exports as a possible measure to address record fuel prices.
Some analysts and market participants cited by Reuters said restrictions may not reduce prices and could contribute to further disruptions in fuel supplies in the U.S. and international markets.
The potential measure comes as diesel and jet fuel availability remains an area of attention despite the improvement in crude oil supply.
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