Oil prices traded near their lowest levels in more than two weeks on Wednesday as markets assessed increased Gulf supplies and diplomatic developments involving the U.S. and Iran.
Brent crude futures rose 16 cents, or 0.16%, to $99.41 a barrel by 08:09 GMT, while West Texas Intermediate futures fell 50 cents, or 0.55%, to $90.02.
Brent had fallen to $97.36 in the previous session, its lowest level since September 8, while WTI touched its lowest level since September 1 earlier on Wednesday.
The moves came as U.S. President Donald Trump said his representatives had held what he described as productive talks involving mediators for Iran, while also maintaining the possibility of further military action.
Saudi Arabia Restarts East-West Pipeline
WisdomTree commodity strategist Nitesh Shah said developments surrounding the diplomatic discussions had contributed to moves in oil 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.”
Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, according to sources cited by Reuters.
The pipeline had been shut following drone attacks earlier in September, interrupting crude loadings from the port of Yanbu.
Saudi Arabia has been using the route to redirect around 4 million barrels per day to the Red Sea, equivalent to approximately 4% of global oil supply, following disruptions to Gulf shipments through the Strait of Hormuz.
The country has also offered additional crude to Asian refiners from locations outside the Strait.
Iraq is increasing oil exports as well. The country’s oil minister said exports were running at more than 3 million barrels per day, with shipments through Turkey expected to increase to more than 600,000 barrels per day.
Iran Signals Conditional Reopening of Strait of Hormuz
A senior Iranian official told Reuters that the Strait of Hormuz could reopen within seven days if the United States reduced military pressure and lifted its blockade of Iranian ports.
The comments added to indications of a potential increase in available crude supplies.
U.S. inventory data provided another factor for the market, with industry figures showing crude stocks increased by 1.8 million barrels in the week to September 18. Analysts surveyed by Reuters had expected inventories to decline.
Official weekly inventory figures from the U.S. Energy Information Administration are due later on Wednesday.
Diesel and Jet Fuel Supplies Remain Tight
Matt Stanley, head of market engagement at Kpler, said the improvement in crude availability had not resolved constraints in refined products.
“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.
President Trump said on Tuesday that he supported the idea of restricting U.S. diesel exports as a possible response to record fuel prices.
Analysts and market participants cited by Reuters have questioned whether such a measure would lower prices, with some warning that export restrictions could create additional disruptions in domestic and international fuel markets.