Economy
Crude Oil Prices Fall as Saudi Pipeline Restarts, Hormuz Traffic Resumes
By Adedapo Adesanya
Crude oil prices fell on Tuesday amid increasing flows of Saudi crude and the restart of the East-West pipeline and ship movements through the Strait of Hormuz.
Brent crude futures settled at $99.25 a barrel after losing $1.09 or 1.09 per cent, while US West Texas Intermediate (WTI) crude futures traded at $94.99 a barrel, down $1.19 or 1.24 per cent.
US President Donald Trump dashed hopes that an agreement would come soon between his country and Iran, when he said a peace deal would come after the US midterm elections in early November. He also said that without a peace deal, he could “annihilate” Iran.
The American President is expected to meet with world leaders at the UN in New York this week, feeding hopes for stability in the Middle East and perhaps even progress in ending Russia’s war in Ukraine, which started in February 2022.
Saudi Arabia has restarted its East-West oil pipeline, restoring at least some flow through the 4-million-barrel-per-day route that had become the kingdom’s main escape hatch around the Strait of Hormuz.
Reuters reported that the pipeline is running at a low rate for now, with Aramco working to return flows to roughly 4 million barrels per day. A full restart could still take weeks, but one cargo was scheduled to load at the Red Sea port of Yanbu for China.
Satellite and tracker data showed Saudi oil moving through the strait averaging about 2.9 million barrels a day over the last six days, up from roughly 700,000 barrels a day in August.
A senior Iranian official also said the country can reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade on Iranian ports. The official said the Iranian delegation to the UN General Assembly in New York has full authority to revive diplomacy with the US.
However, there won’t be any direct meeting between US President Donald Trump and Iranian President Masoud Pezeshkian, as some reports have suggested in the past few days.
Before US-Israeli attacks on Iran began in late February, the Strait of Hormuz handled about one-fifth of global oil and liquefied natural gas supplies.
