Oil Prices Fluctuate Amid Ongoing Conflicts and Supply Disruptions
The global oil market is experiencing volatility due to ongoing conflicts and supply chain disruptions. Brent crude, the global benchmark, has been trading around $100 a barrel for weeks, with a recent spike above $107 on September 10. The price increase can be attributed to various factors, including the Iran-US conflict that began in February, which disrupted tanker traffic through the Strait of Hormuz.
According to analysts, Middle East flows have recovered to around 80% of their pre-war pace, but total shipments are still about 6 million barrels a day under the 2025 average. The Houthi fighters' seizure of Perim Island and declaration of a maritime embargo on Saudi Arabia in July have also contributed to the price increase.
The situation is further complicated by the shutdown of Saudi Arabia's East-West pipeline, which was knocked out after multiple attacks in September. Although it has resumed at a lower rate, the restart is still in its early stages, and Houthi strikes on Saudi infrastructure continue.
US-Iranian negotiators are meeting on the sidelines of the UN General Assembly to discuss a potential agreement, which could ease tensions and lead to a Hormuz arrangement. However, analysts warn that further declines in oil prices would be difficult unless physical flows improve significantly.