Oil Prices Hold Steady as Supply and Geopolitical Tensions Balance

Oil prices ended Tuesday with minimal gains, as the market digested mixed geopolitical developments and supply updates. WTI (X6) settled just $0.01 higher at $89.44 per barrel, while Brent (Z6) rose $0.26 to $100.58 per barrel. The trading session saw two-way action, with traders focusing on the latest developments in US-Iran talks and the status of Saudi Arabia's East-West pipeline.

On the supply side, Saudi Energy Minister reported that the East-West pipeline is currently flowing at 5.8 million barrels per day (BPD), down from its 7 million BPD capacity. Operations resumed around five days after a recent disruption, with reports indicating damage to three of the 11 pumping stations but no harm to the pipeline itself. Earlier in the day, Saudi Arabia confirmed that strikes had hit the Jazan and Najran airports, adding to geopolitical tensions.

The US Energy Information Administration (EIA) also revised its long-term oil demand forecasts, slightly lowering its 2026 projection to 102.4 million BPD from 102.6 million BPD, and its 2027 forecast to 104.6 million BPD from 105 million BPD. Analysts noted that such demand-side adjustments have historically had less impact than supply disruptions. The market is now watching for the next EIA inventory report and any updates on loading schedules at Gulf terminals to gauge whether the current risk premium will persist or fade.

Geopolitical developments continued to shape market sentiment, with Qatar reporting that US-Iran talks are ongoing and the Iranian Minister describing discussions with the Emir of Qatar as “constructive.” However, an explosion near Qeshm Island, Iran, added a layer of uncertainty to the situation.