Crude benchmarks held relatively steady on Tuesday, with Brent crude sitting just above the $100-a-barrel mark and West Texas Intermediate hovering around $90, as market participants balanced a notable rebound in regional exports from the Middle East against continued disruptions to energy infrastructure from ongoing attacks. During Asian trading hours, Brent crude hovered just above $100.60 a barrel while West Texas Intermediate held near the $89.70 mark.
Prices held around the $100 mark through several downward probes following Monday's drop to a fortnight low, with each push toward a breakdown finding resistance in a supply picture that has grown in volume yet remains vulnerable in terms of reliability. Brent crude has been navigating a tug-of-war between a supply outlook that has turned notably softer and a geopolitical risk component that continues to hold prices above where fundamentals alone would place them.
The seven leading economies agreed on a four-month drawdown of 100 million barrels from their strategic reserves, covering both crude oil and diesel fuel, with diesel supplies taking priority in the opening phase. Alongside holding November output quotas in place, OPEC+ saw crude shipments out of the Middle East edge back toward the volumes recorded before the conflict broke out, a shift that took shape in the final days of the previous month.
According to Kpler tracking data, outbound shipments from the region topped the pre-conflict benchmark of roughly 18 million barrels per day on four separate occasions during the last week of September, with the peak reading climbing to 22.5 million barrels. Consumption tracked at roughly 18.5 million barrels per day as of the first of October, recorded across a rolling seven-day window.
According to Tim Waterer, chief analyst at KCM Trade, a combination of rising export volumes and emergency inventory releases had begun easing near-term supply pressure in the market. Prices for Brent crude have repeatedly run into resistance when approaching the $102 mark, limiting the duration of any upward moves.
Detractors of that position contend that elevated export numbers offer a distorted lens through which to gauge whether the market has genuinely stabilised. Cargo movement through the Gulf carries elevated costs and logistical hurdles that operators must navigate. Per-trip operating costs on shuttle routes between tanker ports can reach $40 million in each direction, a burden that has grown heavier as a recent upturn in hostile activity near the Strait of Hormuz drives both insurance premiums and security outlays upward.
Supplies of processed petroleum products have stayed well below crude shipments, leaving the diesel market under strain. Houthi forces in Yemen announced responsibility for strikes directed at airports, defence installations, and an Aramco oil-processing facility in Rabigh, a development that added further strain to an already tense regional environment. No statement from Saudi authorities verifying the extent of the refinery damage had come through at that point.
Forces aligned with Saudi Arabia pressed forward with a new push for control near the Bab el-Mandeb Strait. BMI analysts place the probability of any preliminary agreement between the United States and Iran before early 2027 at low, a window that keeps open the possibility of extended disruption along Gulf shipping routes.
Where prices head from here hinges on whether the easing of supply constraints holds over time rather than proving short-lived. Under a scenario where Gulf shipments hold near pre-war volumes, G7 supplies flow without disruption, and tightness in the diesel market eases, Brent crude's price floor around $100 per barrel may give way, with the benchmark potentially drifting toward the mid-$90 range.
A cut in the official selling price that Saudi Arabia set for November crude shipments bound for Asia adds to the picture of a loosening supply-demand balance in the months ahead. Production from OPEC+ members continues to fall short of agreed output targets, vessel incidents in shipping lanes have been on the rise, and stockpiles worldwide have stayed lean following an extended period of supply disruption.
