Oil Prices Rise as Gulf Tensions Offset Strong Middle East Exports
SINGAPORE — WEB DESK: Oil prices edged higher on Tuesday as continuing security concerns in the Middle East maintained a geopolitical risk premium, while resilient regional crude exports and plans to release emergency reserves kept gains limited.
Brent crude futures rose 27 cents, or 0.3%, to $100.59 a barrel at around 0330 GMT.
US West Texas Intermediate crude futures gained 30 cents, or 0.3%, to $89.73 a barrel.
The market remained caught between competing forces, with security risks supporting prices while improving physical crude flows reduced immediate concerns about a severe global supply shortage.
Middle Eastern crude exports exceeded pre-war levels on several days during late September as producers adapted shipping routes and logistics to maintain deliveries despite disruption around the Strait of Hormuz.
Gulf oil flows excluding Iran recovered to more than 81% of pre-war levels in September, led by improving Saudi exports despite continuing threats to regional shipping and attacks on energy infrastructure.
However, the recovery in crude shipments has not eliminated concerns surrounding one of the world’s most important energy-producing regions.
Renewed attacks on tankers around the Strait of Hormuz have increased shipping, insurance, routing and security costs, keeping traders cautious about assuming that regional supply conditions have fully normalised.
The conflict involving Saudi Arabia and Iran-aligned Houthi forces in Yemen has added another layer of uncertainty.
The Houthis said they had targeted several locations in Saudi Arabia, including an Aramco refinery in Rabigh. Those claims had not been independently verified.
Tensions have also persisted as diplomatic efforts involving the United States and Iran struggle to produce a breakthrough.
Meanwhile, stronger Middle East exports and emergency measures by major economies have helped ease fears of an immediate shortage.
G7 countries have agreed to release 100 million barrels of crude oil and diesel from emergency reserves while pledging to avoid restrictions on energy exports.
Low global oil inventories are nevertheless making traders cautious about expecting a sustained decline in prices.
Shipping costs also remain under pressure, with Gulf-to-Asia freight rates reaching new highs amid elevated security risks and tightness in tanker availability.
The competing pressures have kept Brent around the psychologically important $100-a-barrel level.
Oil markets are expected to remain sensitive to developments around the Strait of Hormuz, Saudi energy infrastructure, regional shipping and any progress in diplomatic efforts aimed at reducing Middle East tensions.
