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Oil Prices Decline Amid Recovery of Middle East Exports and US Supply Moves
Oil prices fell on Tuesday, settling at session lows as recovering exports from the Middle East and developments related to US supply outweighed ongoing concerns about the US-Israeli war on Iran. Brent crude futures closed down approximately 2.5% at around $103 per barrel, while US West Texas Intermediate (WTI) dropped about 3.5% to around $89 per barrel. Despite the decline, Brent remains on track for a significant monthly gain, reflecting the persistent war risk premium in the market.
The decline in prices coincided with a rebound in Middle East crude exports, which reached around 16 million barrels per day in September, the highest level since the conflict began in late February. Saudi Arabia resumed tanker loadings from its Red Sea port of Yanbu after restarting operations on the East-West Pipeline. Additionally, the US Department of Energy announced an offer of up to 40 million barrels from the Strategic Petroleum Reserve, although a similar offer in June resulted in minimal uptake.
Diplomatic efforts are also influencing market dynamics, with Qatar indicating ongoing mediation between the US and Iran. However, former President Donald Trump denied reports suggesting he offered concessions to Iran to end the conflict. Meanwhile, the White House is urging the European Union to utilize emergency diesel stocks to help lower global prices, while also considering regulatory changes to facilitate broader sales of red-dyed diesel as an alternative to a diesel export ban. Traders are now closely monitoring the recovery of Middle East exports and the potential impact of US supply policies.
Source: KLEA News