Middle East crude exports rebounded to 17.5 million barrels daily, reaching 98% of pre-war levels.
US SPR releases of up to 40 million barrels and rising inventories helped ease immediate supply fears.
Benchmark oil prices remain on track for monthly gains driven by ongoing US-Iran conflict disruptions.
West Texas Intermediate (WTI) oil price edges higher after registering nearly 4.5% losses in the previous day, trading around $88.50 per barrel during Asian hours on Wednesday. Crude oil prices eased as energy flows from the Middle East showed clear signs of improvement.
Analysts noted that the 10-day average of crude exports from the region recovered to 17.5 million barrels per day, reaching 98% of pre-war levels. This recovery comes as Saudi Arabia resumed crude exports through its East-West pipeline at roughly half its capacity, complemented by a steady stream of covert shipping continuing through the Strait of Hormuz.
Adding to the downward pressure on prices, another major release of emergency reserves in the US helped alleviate lingering supply concerns. The US government plans to tap the Strategic Petroleum Reserve (SPR) for up to 40 million barrels to combat soaring fuel costs at home. Furthering this bearish sentiment, industry data indicated that US crude inventories rose by 1 million barrels last week.
Despite these recent pullbacks, the US oil benchmark remains on track for a third consecutive monthly gain. Ongoing support for prices continues to be driven by the prolonged US-Iran conflict and widespread disruptions to global supply.
Oil stays in focus as US-Iran tensions underpin latest gains
Strategists at Scotiabank stress that “the market’s primary focus remains centered on oil prices,” with the latest advance in crude attributed to “the renewed deterioration in US/Iran negotiations and President Trump’s rejection of last week’s Iranian proposal to reopen the Strait of Hormuz.” They note that these geopolitical developments are reinforcing the recent upswing in energy markets and keeping oil firmly at the forefront of investors’ attention.
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