Middle East Exports Steady Oil Prices Amid Strait of Hormuz Risks
Oil prices remained stable as traders balanced rising Middle Eastern exports against growing risks in the Strait of Hormuz. Brent crude settled near $101 per barrel, while West Texas Intermediate (WTI) hovered around $89. Despite earlier drops, increased flows through the strait, key for global energy supply, provided some stability, though thinning inventories remained a concern. Kuwait and Iraq are boosting exports, while Saudi Arabia is pumping 5.8 million barrels daily through its East-West pipeline.
Vitol Group CEO Russell Hardy highlighted the critical need for 10 to 14 million barrels to flow through Hormuz to maintain balance heading into winter, citing depleted Western inventories. However, shipping risks persist, with Iran escalating attacks on tankers. The UK reported nine incidents this month alone, doubling September's total. India condemned recent attacks that injured its crew members.
Brent prices are up 60% this year following February's US-Israel strike on Iran, which disrupted supplies and fueled inflation. While crude flows have rebounded, product markets remain tight due to Ukrainian strikes on Russia, prompting G7 stockpile releases. Saudi Energy Minister Prince Abdulaziz bin Salman noted the kingdom's quick recovery of its East-West pipeline after recent drone attacks.
Middle Eastern oil leaders warned of the financial burden from the Iran conflict, estimating tens of billions in infrastructure repairs. Meanwhile, fighting in Yemen near the Bab el-Mandeb strait has intensified, with the Saudi-backed government reclaiming territory from the Houthis. Analysts suggest these developments may ease prices, though renewed hostilities remain a lingering risk.