Oil Prices Slide as Improved Supply Outlook Weighs on Markets
Oil prices continued their decline on Wednesday as investors grew optimistic about improved Gulf supply after Saudi Arabia restarted operations at its East-West Pipeline to the Red Sea.
The pipeline, which carries around 4 million barrels per day - roughly 4% of global supply - was forced to shut down due to drone attacks blamed on Iraqi militia on September 11. However, with signs of increased Middle Eastern oil flows, benchmark Brent crude futures fell $1.09, or 1.1%, to $98.16 a barrel as of 0421 GMT.
The US-Iran war has disrupted oil flows from Saudi Arabia and its Gulf neighbors through the Strait of Hormuz, leading Riyadh to reroute around 4 million barrels per day via the pipeline to Yanbu. Saudi also offered more barrels to Asian refiners for lifting from locations outside of the Strait of Hormuz.
Iraq, too, is increasing oil exports, with its oil minister, Basim Mohammed, saying the country is exporting over 3 million bpd and expects to boost exports via Turkey to more than 600,000 bpd. Provisional data showed Iraqi crude exports in August at 2.3 million and 2.17 million bpd, up from July's level but below February's pre-war level of 3.7 million and 3.362 million bpd.