Middle East Supply Concerns Boost Oil Prices Again

Oil prices rose for a second consecutive day on Tuesday as ongoing concerns about Middle East supply disruptions due to the US-Iran conflict outweighed signs of recovering crude exports from the region. Brent oil had risen 63 cents, or 0.6%, to $105.91 a barrel by 0002 GMT, while WTI was at $93.32, up 72 cents, or 0.8%. 'A clearer picture is emerging of higher oil export volumes leaving the Gulf,' said Tim Waterer, chief analyst at KCM Trade, but added that much of this increase relies on workarounds like ship-to-ship transfers.

Crude exports from major Middle Eastern producers increased to 12.8 million barrels a day in September, the highest since February, according to preliminary figures from data provider Kpler. This was driven by higher shipments from Saudi Arabia and the United Arab Emirates. However, US and Iranian officials spoke separately with mediators on Tuesday in an effort to end seven months of war.

While there are competing forces at play, traders are trying to separate signal from noise, said Waterer. The ongoing conflict has focused attention on the Strait of Hormuz, a critical shipping lane for oil and gas supplies, which has disrupted energy markets. In related news, the US is considering regulatory relief to allow broader sales of red-dyed diesel, a move that could help lower prices by allowing some buyers to avoid federal fuel tax.