Oil prices settle lower as crude flows from Middle East improve

Key Points:

• Oil prices declined on Tuesday due to increased Saudi crude flows following the restart of the East-West pipeline and rising ship traffic through the Strait of Hormuz, a key passage for 20% of global oil supply before the US-Israeli conflict with Iran began in February.
• Brent crude settled at $99.25 per barrel, down 1.09%, and WTI crude closed at $94.99 per barrel, down 1.24%, after initially falling more than $2 per barrel; prices pared losses after US President Donald Trump dampened hopes for a near-term peace deal, stating it would come after the November midterm elections.
• Saudi Arabia resumed operations at the East-West pipeline and expected to restart exports from Yanbu port, with crude flows through the Strait of Hormuz increasing to about 2.9 million barrels per day, up from 700,000 barrels in August, signaling proactive measures to boost supply.
• An Iranian official indicated the country could reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade, with the Iranian UN delegation authorized to pursue diplomacy, suggesting potential progress in easing regional tensions.
• Analysts noted that while oil prices may not fall much further until supply through the Strait of Hormuz increases, especially refined products, diesel prices remain high due to export cuts from major producers amid ongoing conflicts in Iran and Ukraine.