Oil stabilizes as supply nears pre-war levels
Oil prices stabilized after their largest drop in more than a week, amid signals of a recovery in Middle Eastern supplies to levels close to pre-war figures, following Saudi Arabia’s resumption of oil flows through the east-west pipeline that bypasses the Strait of Hormuz. In the region, oil exports increased to around 17.5 million barrels per day, approximately 98% of pre-war levels, with continued secretive flows through the Strait of Hormuz. This came alongside a decline in oil prices, with Brent crude nearing $103 a barrel and West Texas Intermediate around $89. Market expectations point to a period of stability amid ongoing geopolitical volatility, including potential U.S. sanctions on diesel, the repercussions of the Middle East conflict, and its effects on supplies. Despite the increasing flows, supplies of products like diesel and gasoline remain low, and the U.S. continues to draw from its reserves to support the market, with inventories rising to levels not seen since May. Data also indicates strong demand for spot oil, supported by rising shipping costs.
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