Middle East Export Recovery Sinks WTI Below $90.00 Amid US-Iran Tensions
The price of West Texas Intermediate (WTI) crude oil remains below $90.00 due to recent developments in global supply.
According to analysts, the 10-day average of crude exports from the Middle East has recovered to 17.5 million barrels per day, reaching 98% of pre-war levels. This is largely attributed to Saudi Arabia resuming crude exports through its East-West pipeline at roughly half its capacity and a steady stream of covert shipping continuing through the Strait of Hormuz.
Adding to downward pressure on prices, the US government plans to tap into its Strategic Petroleum Reserve (SPR) for up to 40 million barrels to combat soaring fuel costs. Industry data also indicates that US crude inventories rose by 1 million barrels last week.
Despite these recent pullbacks, strategists at Scotiabank stress that 'the market's primary focus remains centered on oil prices.' They attribute the latest advance in crude to 'the renewed deterioration in US/Iran negotiations and President Trump's rejection of last week's Iranian proposal to reopen the Strait of Hormuz.'