Oil prices surge to $100 as Iran talks and Saudi supply recovery boost market
Oil prices rose to $100 per barrel on Wednesday afternoon after trading lower in the morning. The increase came as Iran and the US held negotiations in New York to end the conflict, while Saudi supply recovery remained a focus.
Brent, the benchmark for two-thirds of the world's oil, was up 1.11% to $100.3 per barrel at 3:48 pm UAE time, while West Texas Intermediate, the gauge that tracks US crude, rose 0.33% to $90.82 a barrel.
Analysts expect a credible agreement to reopen the Strait of Hormuz and continued recovery in Saudi exports could push Brent towards the low $90s, pricing a more normal supply environment. However, they also warn that unless physical flows improve substantially, the downside will become progressively harder.
The East-West pipeline in Saudi Arabia, which has a capacity to carry 7 million barrels of oil per day, was shut earlier this month after damage from drone attacks but resumed operations on Tuesday at a lower rate. The restart and signs of better flows through Hormuz reduce the immediate risk of a severe supply squeeze.