Brent drops below $104 as higher Gulf shipments ease some supply concerns, though regional disruptions keep prices elevated
Oil prices fell around 2% on Tuesday as signs of recovering Middle East crude exports eased some supply concerns, although uncertainty surrounding the US-Israeli war on Iran and disruptions to regional shipping continued to support prices.
Brent crude futures fell $1.96, or 1.86%, to $103.32 a barrel by 1306 GMT, while US West Texas Intermediate (WTI) crude declined $1.95, or 2.11%, to $90.65.
Despite Tuesday’s decline, Brent was on course for a monthly gain of around 14%, while WTI was headed for an increase of about 5.6%.
Crude exports from major Middle Eastern producers rose to 12.8 million barrels per day in September, their highest level since February, according to preliminary data from Kpler. Higher shipments from Saudi Arabia and the United Arab Emirates contributed to the increase.
Saudi Arabia has also resumed oil loadings from its Red Sea port of Yanbu after restarting operations on the East-West Pipeline, according to trade sources and shipping data, providing another route for regional exports.
However, analysts said some of the recovery continues to depend on costly and less efficient measures, including ship-to-ship transfers, keeping crude prices elevated despite improving export volumes.
European diesel futures also eased to around $1,379 per metric ton on Tuesday after reaching as high as $1,535 last week. Prices have more than doubled since the start of the year.
The decline came as Washington considered regulatory measures aimed at easing diesel prices, including allowing broader sales of red-dyed diesel, according to people familiar with the discussions. The proposal has emerged as an alternative to a possible diesel export ban.
Meanwhile, US and Iranian officials held separate discussions with mediators in renewed efforts to end seven months of fighting.
US President Donald Trump, however, rejected reports that Washington had offered sanctions relief or the release of frozen Iranian funds in return for steps concerning Tehran’s nuclear programme.
Supply indicators in the United States were also in focus. A preliminary Reuters poll showed US crude oil and gasoline inventories were expected to have declined last week, while distillate stocks were seen broadly unchanged.
