Oil prices ease as Saudi pipeline restarts and Iraq lifts exports
Crude prices drifted lower as Saudi Arabia restored its East-West pipeline, Iraq raised exports, and traders eyed US-Iran talks in New York.
Oil prices edged lower on Wednesday, weighed down by improving supply from the Gulf and cautious optimism over diplomatic efforts to end the US-Iran conflict.
Brent crude futures slipped 7 cents, or 0.07%, to $99.18 a barrel by 0119 GMT, while West Texas Intermediate fell 35 cents, or 0.39%, to $90.17. The benchmark had closed below $100 on Tuesday for the first time since September 8.
Saudi Arabia restarted operations on its East-West Pipeline to the Red Sea on Tuesday, according to three people briefed on the matter, a move that points to rising Middle Eastern oil flows. Drone attacks, which Riyadh has blamed on Iraqi militia, had forced the pipeline's closure on September 11 and halted crude loadings at the Yanbu port.
Since the US-Israeli war on Iran disrupted flows through the Strait of Hormuz, Saudi Arabia has used the pipeline to reroute about 4 million barrels per day — roughly 4% of global supply — to Yanbu.
Iraq is also increasing exports. Oil minister Basim Mohammed said on Tuesday that the country is shipping more than 3 million bpd and expects to raise exports through Turkey to above 600,000 bpd. Provisional shiptracking data from Vortexa and Kpler put Iraqi crude exports in August at 2.3 million and 2.17 million bpd, up from July but still below February's pre-war levels of 3.7 million and 3.362 million bpd.
On the diplomatic front, US President Donald Trump warned on Tuesday that he could "annihilate" Iran, but also said his envoys Steve Witkoff and Jared Kushner had held productive talks with mediators of Iran to end the war. "I think there's a lot of momentum for them to make a deal," Trump said.
"The market is currently feeling more constructive about the global oil supply picture than it was a few weeks ago," said Tim Waterer, chief analyst at KCM Trade. "The meeting of US and Iranian delegations in New York has given traders a glimmer of hope ... Despite the continued tough rhetoric, including threats of 'annihilation,' the market is choosing to price in the possibility of talks."
Adding to the downward pressure, industry data showed US crude inventories rose by 1.8 million barrels in the week to September 18, against analyst expectations of a decline. Official weekly figures from the US Energy Information Administration are due at 10:30 a.m. ET (1430 GMT).