Middle East oil shipments ease market pressure as Brent holds near $100
Oil prices held steady after a sharp decline on Monday, as signs of increased shipments from the Middle East suggested a loosening market. Brent crude traded near $100 a barrel, while West Texas Intermediate (WTI) remained above $89. Producers in the Persian Gulf are sending larger volumes through the Strait of Hormuz, despite ongoing risks in the region. Kuwait and Iraq are ramping up exports, with Saudi Aramco cutting prices to a six-year low to secure market share.
The rebound in Middle East oil flows follows disruptions caused by the US and Israel's attack on Iran in February, which had driven Brent crude up by 65% this year. However, product shipments remain constrained, partly due to Ukrainian strikes on Russia. The near-term outlook for WTI suggests easing market tightness, with the prompt spread narrowing significantly over the past two weeks.
Geopolitical risks persist, particularly in Yemen, where Saudi-backed forces are advancing towards the Bab el-Mandeb chokepoint. Recent Houthi attacks had targeted energy infrastructure and tankers. Later on Tuesday, the US Energy Information Administration is set to release its Short-Term Energy Outlook, which will provide insights into fuel conditions ahead of the Northern Hemisphere winter.
In the US, President Donald Trump eased restrictions on tax-exempt dyed diesel to lower costs ahead of midterm elections in November. Analysts caution that the period leading up to the elections could see heightened risks, with Robert Yawger of Mizuho Securities USA noting that high energy prices remain a likely outcome.