Oil Prices Fall Below $100 as Hormuz Hopes Rise
Oil prices dropped below $100 per barrel as hopes of reopening the Strait of Hormuz and restarting Saudi Arabia's East-West pipeline increased. The benchmark for two-thirds of the world's oil, Brent, fell by 2.64% to $97.69 a barrel at 3:09 pm UAE time on Tuesday.
Saudi Aramco restarted its East-West pipeline at a reduced rate on Tuesday, and crude exports from the Red Sea port of Yanbu are expected to resume later in the day. This is Saudi Arabia's principal workaround for Hormuz, carrying crude across the peninsula to Yanbu.
The pipeline was shut down after drone attacks damaged pumping infrastructure on September 13, halting crude loadings at the Red Sea port and forcing Aramco to cancel some cargoes to European customers. Since then, Saudi Arabia has sharply increased shipments through Hormuz, averaging 2.9 million barrels per day over six days to September 18.
Tehran is prepared to reopen the Strait of Hormuz within a week if the US eases military pressure and lifts its blockade of Iranian ports. A senior Iranian official told Reuters that Iran has submitted a proposal to Washington through mediators, raising hopes of a diplomatic breakthrough after nearly seven months of disruption.