SINGAPORE: Oil prices climbed for a second consecutive session on Tuesday as concerns over potential disruptions to Middle East supplies continued to outweigh signs of a recovery in crude exports from the region.
Brent crude futures rose $1.49, or 1.4 per cent, to $106.77 a barrel, while US West Texas Intermediate (WTI) crude gained $1.34, or 1.5pc, to $93.94. Both benchmarks had ended the previous session nearly $1 higher.
“A clearer picture is emerging of higher oil export volumes leaving the Gulf, but much of that increase still relies on workarounds such as ship-to-ship transfers,” said KCM Trade chief analyst Tim Waterer.
He added that such methods were less efficient and more costly than normal shipping operations, helping keep crude prices elevated.
Preliminary data from energy intelligence provider Kpler showed crude exports from major Middle Eastern producers increased to 12.8 million barrels per day in September, the highest level since February. The rise was supported by increased shipments from Saudi Arabia and the United Arab Emirates.
Meanwhile, US and Iranian officials held separate discussions through mediators as efforts intensified to end the seven-month conflict. Officials from both countries said further negotiations were expected, potentially focusing on an amended version of a seven-day proposal put forward by Iran last week on the sidelines of the United Nations General Assembly.
“The dominant risk remains the US-Iran standoff and its implications for energy prices and inflation expectations,” UOB analysts said in a client note.
Iranian officials have reportedly expressed doubts about reaching an agreement before the situation around the Strait of Hormuz worsens, keeping uncertainty over oil supplies elevated.
The conflict, which began in late February with US and Israeli attacks on Iran, has put the Strait of Hormuz at the centre of global energy market concerns. The strategic waterway is a key transit route for oil and gas shipments, and any prolonged disruption could have significant implications for international energy supplies and prices.
Separately, the US government is considering regulatory relief that would allow wider sales of red-dyed diesel in an effort to reduce fuel costs, according to people familiar with the discussions.
The proposal could enable some buyers to avoid the federal fuel tax and has emerged as a leading alternative to a broader ban on diesel exports, which has also been under consideration.
Story by Reuters
