Oil prices rose for a second consecutive session on Tuesday as concerns over potential supply disruptions from the US-Iran conflict in the Middle East outweighed signs of recovering regional crude exports.
Brent crude futures rose $1.49, or 1.4 per cent, to $106.77 a barrel by 0326 GMT. US West Texas Intermediate (WTI) crude gained $1.34, or 1.5 per cent, to $93.94 a barrel. Both benchmarks ended the previous session nearly $1 a barrel higher, reports Reuters.
“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. Those methods are less efficient and more costly than normal operations, which is why crude prices remain elevated,” said KCM Trade chief analyst Tim Waterer.
Preliminary figures released by data provider Kpler on Monday showed crude exports from major Middle Eastern producers rose to 12.8 million barrels a day in September, the highest level since February. Higher shipments from Saudi Arabia and the United Arab Emirates contributed to the increase.
Meanwhile, US and Iranian officials held separate talks with mediators in a renewed effort to end seven months of war, officials from both countries said. Further negotiations are widely expected to focus on an amended version of a seven-day proposal presented by Iran last week on the sidelines of the United Nations General Assembly.
Uncertainty remains high in the oil market.
“The dominant risk remains the US-Iran standoff and its implications for energy prices and inflation expectations,” analysts at UOB said in a client note.
“Iranian officials have reportedly expressed pessimism about reaching a deal before the Strait of Hormuz situation escalates further, keeping oil supply uncertainty elevated,” they added.
The war began in late February with US and Israeli attacks on Iran, drawing intense attention to the Strait of Hormuz. The crucial shipping lane carries major oil and gas supplies, and disruption there has unsettled energy markets.
In another development, the United States is considering regulatory relief that would allow broader sales of red-dyed diesel to help lower prices, people familiar with the discussions told Reuters. The move could enable some buyers to avoid federal fuel tax.
The proposal emerged after days of deliberation as a leading alternative to a diesel export ban.
