Global crude oil prices fell about 1% after Saudi Arabia raised its oil shipment estimates, but the decline was limited as Donald Trump dashed hopes for a deal with Iran.
Foreign news agencies reported that crude oil prices dropped on Tuesday due to increased Saudi crude shipments following the resumed operation of the East-West Pipeline and improved shipping through the Strait of Hormuz after disruptions from the U.S.-Israel and Iran conflict.
However, Brent and U.S. crude prices fell less than expected after President Donald Trump dampened hopes for a short-term conflict resolution deal, stating that a peace agreement is likely only after the U.S. midterm elections in early November, and warning he might “crush” Iran if no deal is reached.
Brent crude for November delivery closed at $99.25 per barrel, down $1.09 (-1.09%), while West Texas Intermediate (WTI) for October delivery closed at $94.99 per barrel, down $1.19 (-1.24%).
Earlier in the day, both crude benchmarks had fallen by more than $2 per barrel before recovering somewhat following Trump's speech at the United Nations General Assembly.
Saudi Arabia resumed operations of the East-West Pipeline, which had been halted since 13 September after a drone attack by Yemen’s Houthi rebels, and is expected to soon resume exports via the Yanbu port.
Satellite data showed that Saudi oil shipments through the Strait of Hormuz averaged 2.9 million barrels per day over the past six days, a significant increase from about 700,000 barrels per day in August.
A senior Iranian official told Reuters that Iran is prepared to reopen the Strait of Hormuz within seven days if the U.S. reduces military pressure and lifts port blockades. Iran’s delegation at the UN General Assembly in New York has full authority to restart diplomatic talks with the U.S.
Analysts at Denmark’s Saxo Bank believe oil prices will not decline further until supply through the Strait of Hormuz, especially of refined oil products, increases substantially.
Currently, diesel prices in Europe and the U.S. are hitting new highs due to the wars in Iran and Ukraine, which have sharply reduced oil exports from major producers such as Russia, Saudi Arabia, and the United Arab Emirates.
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Source:euronext