Oil markets, on a Tuesday in late September, are still living inside a war that has now stretched into its seventh month. Gulf crude is slowly finding its way back to the sea, and the numbers show it, yet the barrel remains dear, because the paths it now travels are longer, costlier, and held together by workarounds rather than the old order of things. Diplomats speak of mediation while the American president denies offering anything, and the people who move fuel for a living are left to read these contradictions as weather. It is a moment in which recovery and anxiety coexist, and neither has
Oil Rises a Second Session as Middle East Supply Fears Outweigh Gulf Export Recovery
Much of that increase still relies on workarounds
Oil markets, on a Tuesday in late September, are still living inside a war that has now stretched into its seventh month. Gulf crude is slowly finding its way back to the sea, and the numbers show it, yet the barrel remains dear, because the paths it now travels are longer, costlier, and held together by workarounds rather than the old order of things. Diplomats speak of mediation while the American president denies offering anything, and the people who move fuel for a living are left to read these contradictions as weather. It is a moment in which recovery and anxiety coexist, and neither has yet won.
At dawn in New York, November Brent crude sat just above US$105 a barrel, edging up for a second straight session. The modest daily gain hides a larger story: the price is on course for a monthly rise of roughly 17 per cent, driven by a war between the United States, Israel and Iran that has now run for seven months.
There is encouraging news in the data. Crude exports from major Middle Eastern producers reached 12.8 million barrels a day in September, the highest since February, with Saudi Arabia and the United Arab Emirates shipping more. Yet prices have not come down. Analysts say much of that recovery depends on ship-to-ship transfers, which are slower and more expensive, so the oil remains costly to bring to market.
Diplomacy is stirring but has not yet arrived. Both Washington and Tehran say they have spoken with mediators, while President Donald Trump insists he has offered Iran nothing, despite reports of possible sanctions relief in exchange for nuclear steps.
At home, the administration is weighing how to protect consumers. Broader sales of red-dyed diesel, a farm fuel taxed differently, have emerged as a favoured alternative to banning diesel exports. Some analysts read these deliberations as proof that officials do not yet expect Hormuz and Bab el-Mandeb to reopen soon. For now, markets wait to see whether talks produce substance and which fuel policy Washington chooses.
At 4:44 a.m. Eastern on Tuesday, November Brent crude futures stood at US$105.47 a barrel, up 19 cents, or 0.2 per cent. It was the second straight session of gains. The more actively traded December Brent contract added 11 cents to US$97.94, and U.S. West Texas Intermediate was at US$92.82, up 22 cents.
The small daily moves sit on top of a much larger monthly climb. November-loading Brent is headed for a gain of roughly 17 per cent for the month, and WTI for about 8 per cent. The driver is the U.S.-Israeli war on Iran, now in its seventh month, and the continuing worry about supply from the Middle East.
There is some good news in the numbers. Preliminary figures from the data provider Kpler, released Monday, showed crude exports from major Middle Eastern producers rose to 12.8 million barrels a day in September. That is the highest level since February, helped by larger shipments from Saudi Arabia and the United Arab Emirates.
But the recovery has not pulled prices down. Tim Waterer, chief analyst at KCM Trade, said a clearer picture is emerging of more oil leaving the Gulf, yet much of the increase still depends on workarounds such as ship-to-ship transfers. Those methods, he said, are less efficient and costlier than normal operations, which is why crude remains expensive.
Diplomacy is moving, though not decisively. U.S. and Iranian officials each said they had spoken separately with mediators in a renewed effort to end the war. President Donald Trump, however, said he has offered Iran nothing. He rejected media reports, which cited U.S. officials, that he was willing to ease sanctions and release frozen funds in return for "concrete" steps on Iran's nuclear program.
At home, Washington is weighing how to keep fuel costs down. People familiar with the discussions told Reuters the U.S. is considering regulatory relief that would allow broader sales of red-dyed diesel, which is the agricultural variety taxed differently. That proposal has emerged as a leading alternative to a ban on diesel exports.
PVM analyst John Evans read those deliberations as a signal about the diplomacy. He called the media flashes of possible rapprochement between the U.S. and Iran wishful thinking rather than concrete deals. If it were otherwise, he asked, why would the president still be pondering a diesel export ban and adjusting the tax treatment of red diesel, if he expected petroleum products to soon flow from the choke points disrupted at Hormuz and Bab el-Mandeb?
On the U.S. inventory side, a preliminary Reuters poll taken Monday expected crude and gasoline stocks to have fallen last week, with distillate stockpiles likely unchanged. What to watch next: whether the mediation yields concrete steps, and whether Washington chooses diesel sales relief or an export ban.
Citazioni salienti
Much of the export increase still relies on workarounds such as ship-to-ship transfers, which are less efficient and more costly.— Tim Waterer, KCM Trade
Media flashes of a US-Iran rapprochement are wishful thinking rather than concrete deals.— John Evans, PVM
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