Key facts
- Oil prices fell to their lowest in over two weeks on Wednesday.
- Brent crude futures were trading at $99.41 a barrel, while West Texas Intermediate futures were at $90.02.
- Saudi Arabia restarted its East-West Pipeline, rerouting about 4 million barrels per day.
- Iraq is exporting more than 3 million barrels per day and expects to boost exports via Turkey.
- US crude inventories rose by 1.8 million barrels in the week to September 18.
Oil prices extended declines on Wednesday, with Brent crude futures trading near their lowest in over two weeks at $99.41 a barrel and West Texas Intermediate futures at $90.02. The downward pressure was attributed to improving crude supplies from the Gulf region and growing optimism for a diplomatic resolution to the US-Iran conflict.
Saudi Arabia resumed operations on its critical East-West Pipeline to the Red Sea on Tuesday, a move that allows the rerouting of approximately 4 million barrels per day, or about 4% of global supply, away from the Strait of Hormuz. This restart follows a shutdown on September 11 due to drone attacks. Additionally, Iraq's oil minister stated that the country is exporting over 3 million barrels per day and anticipates boosting exports via Turkey. A senior Iranian official also suggested the Strait of Hormuz could reopen within seven days if US military pressure eases.
Adding to the bearish sentiment, industry data indicated that US crude inventories increased by 1.8 million barrels in the week ending September 18, contrary to analysts' expectations of a decline. Official inventory figures from the US Energy Information Administration were due later on Wednesday.
While US President Donald Trump issued a warning to Iran, he also indicated that his envoys had productive talks with mediators, suggesting a potential for de-escalation. Analysts noted that this diplomatic signaling, coupled with the improved supply outlook, is currently driving prices lower, though they cautioned that the situation remains volatile.