Oil Swings as US and Iran Near Hormuz Deal

Brent crude fell below $104 per barrel on Friday, extending its decline for a third consecutive session as concerns over supply disruptions in the Middle East eased and hopes grew for renewed diplomatic efforts to end the conflict and restore energy flows. Saudi Arabia is targeting the recovery of around half the capacity of its East-West pipeline within days, with a return to full operations expected within six weeks. In the meantime, the kingdom is rerouting some crude exports through the Strait of Hormuz. Shuttle vessels transport crude through Hormuz before loading tankers waiting outside the strait, limiting their exposure to potential Iranian attacks. Reports also suggested that China had urged Iran to help curb Houthi militants after an appeal from Riyadh, as the rebel group intensified attacks on Saudi energy infrastructure. Meanwhile, President Donald Trump said he was weighing whether to resume attacks on Iran ahead of a meeting with Gulf leaders in New York next week.

Brent crude oil settled near $104 a barrel on Thursday, extending a 2.7% drop from the previous session, as Saudi Arabia shifts some crude exports through the Strait of Hormuz to offset the closure of a key pipeline. Saudi Arabia is reportedly making additional crude cargoes available to Asian refiners through ship-to-ship transfers near Oman’s Sohar port. Shuttle vessels transport crude through Hormuz before loading tankers waiting outside the strait, reducing their exposure to Iranian attacks. Saudi Arabia also said it could restore around half of the damaged East-West pipeline’s capacity within days and full operations within six weeks. Saudi crude loadings at Mideast Gulf ports have risen this month, while ship-to-ship transfers in the Gulf of Oman increased to 2.7 million bpd from 1.5 million bpd in August. Meanwhile, Russia’s seaborne oil product exports jumped 16.4% in August from July as refineries returned from maintenance.

Brent crude fell toward $102 a barrel on Thursday, following a 2.7% drop in the previous session, reflecting easing concerns over supply disruptions after Saudi Arabia indicated it could restore around half of the damaged East-West pipeline’s capacity within days and full operations within six weeks. Riyadh is also offering additional crude cargoes to Asian refiners through ship-to-ship transfers near Oman, providing an alternative export route after disruptions at the Yanbu terminal. The developments have reduced immediate fears of a severe supply shortage, but the market remains sensitive to further escalation in the Middle East. The Strait of Hormuz remains contested and continues to be a critical supply route, while the Russia-Ukraine conflict is also disrupting refined-product markets through attacks on Russian refineries.