Key facts
- Brent crude futures settled up $3.83, or 3.86%, to $103.08 a barrel on Wednesday.
- West Texas Intermediate futures gained $1.64, or 1.81%, to $92.16 a barrel.
- Iranian President Masoud Pezeshkian vowed never to surrender in a speech at the UN General Assembly.
- US crude inventories rose by 3 million barrels to 426.4 million barrels in the week ended September 18.
- Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea.
Oil prices settled higher on Wednesday, with Brent crude futures rising by 3.86% to $103.08 a barrel and West Texas Intermediate futures gaining 1.81% to $92.16. The market evaluated Iranian President Masoud Pezeshkian's vow never to surrender, made during a speech at the UN General Assembly, a day after US President Donald Trump issued a threat against Iran. A senior Iranian official indicated that Tehran was reviewing the US response to its proposal to end hostilities, though significant differences remain. Discussions during indirect talks on Tuesday included the potential reopening of the Strait of Hormuz and the lifting of a US naval blockade on Iran. Earlier on Wednesday, Iran's security chief Mohsen Rezaei stated the Strait of Hormuz would not be reopened until Iran's conditions were met.
Meanwhile, European low-sulphur gasoil's premium to Brent crude futures reached a record of about $95 a barrel after President Trump suggested support for a diesel export ban to lower prices, which have surged due to global supply shortages. US Energy Secretary Chris Wright later stated that a diesel export ban would not be effective. Analysts warned such a measure could worsen global supplies and disrupt economies, particularly as Europe has relied on US diesel and jet fuel imports.
Prices were also pressured by increased supplies from the Middle East and hopes for a peace deal between Washington and Tehran. Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, following a shutdown due to drone attacks. The kingdom had also offered more barrels to Asian refiners for lifting from locations outside the Strait of Hormuz. Iraq's minister indicated the country is exporting over 3 million barrels per day and expects to boost exports via Turkey. US crude inventories, however, rose by 3 million barrels in the week ended September 18, contrary to analyst expectations of a draw.