Oil Falls on Tuesday

Crude oil fell below $91 a barrel on Tuesday as markets weighed efforts to ease Middle East tensions. US and Iranian officials have continued separate discussions with mediators, including indirect contacts through Qatar, as regional governments push for ceasefire negotiations. However, Iranian officials have privately expressed doubts that an agreement can be reached before the US midterm elections in November. President Donald Trump has rejected an Iranian proposal to restore full traffic through Hormuz and denied reports that Washington offered sanctions relief in exchange for nuclear concessions. Meanwhile, Saudi Arabia has restored roughly half the flows through its East-West pipeline, with shipments to the Red Sea reaching at least 3.5 million barrels a day. The route provides a crucial alternative to exports through the Strait of Hormuz and is helping offset the lack of progress in diplomatic talks.

Crude oil climbed above $93 per barrel on Tuesday, extending its gains as ongoing uncertainty surrounding US-Iran negotiations outweighed the resumption of oil flows through Saudi Arabia’s East-West pipeline. Iranian officials have reportedly cast doubt on the possibility of reaching an agreement to end hostilities in the Middle East and reopen the Strait of Hormuz before the US midterm elections in November. Recent US-Iran talks in New York produced limited progress, with President Donald Trump rejecting Tehran’s latest proposal to reopen the strategic waterway. However, Trump is reportedly considering sanctions relief for Iran and the unfreezing of funds if meaningful progress is made toward a nuclear agreement. Meanwhile, Saudi Arabia has reportedly restored oil flows to around 3.5 million barrels per day following repairs to a key pipeline that provides an alternative route around Hormuz.

Crude oil trimmed gains to near $93 a barrel after topping $96 on Monday amid reports that Saudi Arabia is ramping up flows through its critical East-West pipeline following repairs. Saudi Arabia is reported to have restored flows to around 3.5 million barrels per day. The pipeline was shut down earlier this month after sustaining damage in a drone strike launched from Iraq. Meanwhile, US President Donald Trump is reportedly open to sanctions relief for Iran and the release of frozen funds if concrete progress is made toward a nuclear deal. Earlier, Trump rejected Iran’s conditional offer to reopen the Strait of Hormuz and told aides he expects US strikes on the country to resume after November’s midterm elections. Fading hopes for an imminent diplomatic breakthrough between the US and Iran had driven crude to session highs. Separately, Yemen’s Saudi-led coalition said on Saturday that it had intercepted projectiles launched by Iran-backed Houthi rebels.