Oil Wavers Below $98 as Supply Recovers

Crude oil climbed above $99 per barrel on Thursday, recouping losses from earlier this week after a drone attack on Saudi Aramco’s Shaybah oil field killed two people. The incident underscored rising tensions in the Middle East and heightened concerns over further disruptions to energy supplies. The US has also ordered some personnel and family members to leave American embassies in Saudi Arabia. Meanwhile, Ukraine launched large-scale drone attacks on Russia this week, targeting critical oil infrastructure and signaling Kyiv’s intention to prevent Moscow from expanding diesel exports under an agreement between Presidents Trump and Putin. However, further gains in oil prices may be constrained by rising crude shipments from the Middle East, with export flows nearing prewar levels. Saudi Arabia’s crude exports increased by 7.9% in August, reaching their highest level since March. Russia is also expected to deliver its first diesel shipment to the US on Thursday.

Crude oil prices wavered below $98 a barrel on Wednesday after briefly reaching $100 in a volatile session. Rising crude flows from the Middle East have begun to weigh on prices, with producers ramping up shuttle shipments through the Strait of Hormuz and ship-to-ship transfers in the Gulf of Oman. Tanker-tracking services indicate flows have surpassed pre-war levels. Saudi Arabia’s crude exports rose 7.9% in August to their highest level since March. Meanwhile, Russia is set to send its first diesel tanker to the US on Thursday under an agreement between Presidents Trump and Putin. US Secretary of State Marco Rubio also said Washington is looking to work with India’s Reliance Industries to refine Western energy supplies. However, tensions in the Middle East remain elevated, while record-high freight rates in the Persian Gulf continue to put upward pressure on oil prices.

Crude oil reversed earlier gains to trade around $97 a barrel on Wednesday, as relatively strong flows through the Strait of Hormuz offset concerns over escalating attacks on shipping and energy infrastructure across the Middle East. Iran’s Revolutionary Guards said naval mines had halted three tankers attempting to use routes Tehran considered unauthorized, while the UK Maritime Trade Operations agency reported a vessel had been struck near Oman. Despite the security risks, US Secretary of State Marco Rubio said shipments through the chokepoint were approaching prewar levels, while data from Kpler and Vortexa showed broader Middle Eastern exports had risen since the summer. Separately, Yemen’s Houthi militants claimed attacks on Saudi Aramco facilities in Yanbu and the Shaybah oilfield, as well as airports in Riyadh and Abha. Investors awaited US inventory data after the American Petroleum Institute reported a 4.9 million-barrel decline in crude stocks last week.