Brent and WTI crude fell to two-week lows on Tuesday as Iran signaled it could reopen the Strait of Hormuz within seven days and Saudi Arabia moved to resume exports from its Yanbu port. Bank of America raised its second-half Brent forecast to $95 a barrel even as it flagged continued disruption risk, and separate tensions in the Black Sea and Yemen kept price swings elevated.
Brent, WTI slide as Gulf supply outlook improves
Oil prices dropped to their lowest levels since September 8, with the Brent crude November contract falling $2.11, or 2.1%, to $98.23 a barrel at 1151 GMT. The WTI October contract, which expires Tuesday, lost $2.48, or 2.59%, to $93.30 a barrel, while the more actively traded WTI November contract dropped $2.36, or 2.55%, to $90.01 a barrel.
The declines followed signals that Gulf supply could improve. A senior Iranian official told Reuters that Iran can reopen the Strait of Hormuz within seven days if the United States eases military pressure and lifts its blockade on Iranian ports. Saudi Arabia, meanwhile, restarted operations at its East-West Pipeline and could resume exports from Yanbu port later Tuesday, according to three sources briefed on the matter.
Yanbu shutdown followed drone attacks
Drone attacks forced Saudi Arabia to shut the pipeline on September 13, halting crude loadings at Yanbu. Before the US-Israeli attacks on Iran began in late February, the Strait of Hormuz handled about one-fifth of global oil and liquefied natural gas supplies. Still, Saudi Aramco increased exports through the strait after the Yanbu disruption, loading about 14 million barrels onto seven supertankers in the Gulf on Sunday, tanker-tracking data showed.
BofA lifts Brent forecast despite the pullback
Even as prices eased, Bank of America raised its second-half Brent forecast to $95 a barrel from $83, citing ongoing geopolitical risk. The bank estimated that disruptions to shipments through Hormuz reached a high of roughly 14 million barrels per day, compared with pre-war averages of 4 million to 8 million barrels per day. Brent futures had topped $100 a barrel for several days before sliding below that level on Tuesday.
Yemen and Black Sea tensions add to the swings
The earlier climb also reflected risk beyond the Gulf. Iran-backed Houthi militants and Saudi-aligned forces in Yemen have clashed over territory dominating the Bab el-Mandeb Strait, another critical chokepoint for Gulf oil flows that Saudi Arabia has relied on since Hormuz's closure. Separately, recent comments from Senator Marco Rubio suggest the earlier rise in oil prices was due largely to tensions in the Black Sea and Yemen, tied to the conflict involving Ukraine, Russia and the Houthis.
Sources: Reuters, Commodities & Futures News, Crypto Briefing
Trading involves risk.
Risk Disclaimer
