Oil prices moved higher on Wednesday, recovering after a sharp decline in the previous session as investors assessed improving Middle East export flows alongside continuing concerns about disruptions to shipments through the Strait of Hormuz.
At 05:06 ET, benchmark Brent crude futures for November delivery were up 1.0% at $103.64 per barrel, while U.S. West Texas Intermediate crude futures gained 0.9% to $90.21 per barrel.
The increases followed declines on Tuesday, when Brent settled 2.6% lower and WTI fell 3.5%.
Recent pressure on crude prices has partly reflected Saudi Arabia’s resumption of oil loadings at the Red Sea port of Yanbu following the restart of its East-West Pipeline, providing an alternative export route that bypasses the Strait of Hormuz.
Saudi Arabia Resumes Crude Loadings at Yanbu
Saudi Aramco has informed customers of its October loading schedule, while shipping data showed that nearly 10 million barrels of crude were being loaded at Yanbu and the nearby Al Muajjiz terminal, according to a Reuters report.
Saudi Arabia has also restored flows through its East-West Pipeline to at least 3.5 million barrels per day, equivalent to approximately half of the pipeline’s capacity, Bloomberg reported, citing people familiar with the matter.
The pipeline provides Saudi Arabia with a route for transporting crude from producing areas in the east of the country to the Red Sea, allowing shipments to avoid the Strait of Hormuz.
The recovery in flows has reduced some of the immediate supply concerns associated with the Middle East conflict and contributed to the decline in oil prices during the previous session.
Strait of Hormuz Remains a Source of Supply Uncertainty
Despite the increase in Saudi export flows, the Strait of Hormuz remains a significant source of uncertainty for the oil market.
The waterway has been effectively closed since shortly after the U.S. and Israel began their joint assault on Iran in late February, while diplomatic efforts aimed at reopening the route have yet to result in an agreement.
Analysts at Deutsche Bank said oil markets continue to reflect expectations that the disruption could persist.
Traders are “still pricing in a lengthier period of disruption, even as increased oil flows out of the Gulf have eased the near-term pressure,” the analysts said.
The combination of increased alternative export flows and continued restrictions through the Strait of Hormuz has left markets assessing the duration of the disruption and its potential impact on global oil supplies.
Qatar Mediates Between Washington and Tehran
Diplomatic discussions over the Strait of Hormuz are continuing, with Qatar mediating between Washington and Tehran.
The talks are focused on a potential agreement that could include reopening the Strait of Hormuz and easing some U.S. pressure on Iran.
However, differences remain between the two sides. U.S. President Donald Trump has rejected reports that Washington offered Tehran sanctions relief, while Iran has continued to seek conditions connected with reopening the waterway.
Diplomatic efforts have yet to produce a breakthrough that would allow the strait to reopen.
Trump Reportedly Considers Diesel Export Restrictions
Separately, Trump is considering a range of measures aimed at reducing higher domestic fuel prices, including a possible ban on diesel exports, according to a Financial Times report cited in the supplied information.
The discussions come as higher energy prices increase pressure on U.S. consumers and businesses.
U.S. diesel prices reached $6.53 per gallon last week, according to the Financial Times, more than 70% above their pre-war level.
The potential export restrictions are among the measures reportedly being considered by the administration as it assesses options for addressing higher domestic fuel costs.