Oil at $100 a barrel as focus remains on Iran peace talks and Saudi supply recovery
Oil prices rose slightly to $100 per barrel on Wednesday afternoon, after trading lower in the morning, as Iran and the US hold negotiations in New York to end the conflict and focus remains on Saudi supply. Brent, the benchmark for two thirds of the world's oil, was up 1.11 per cent to $100.3 a barrel at 3.48pm UAE time, while West Texas Intermediate, the gauge that tracks US crude, was trading…
Oil prices climbed to $100 per barrel on Wednesday as Iran and the United States continued negotiations in New York to resolve the conflict and as Saudi Arabia's supply recovery gains momentum. Brent crude, the benchmark for two-thirds of the world's oil, increased 1.11 percent to $100.3 a barrel, while West Texas Intermediate rose 0.33 percent to $90.82 a barrel.
A credible deal to reopen the Strait of Hormuz, coupled with further Saudi exports, could push Brent towards the low $90s, according to Daniela Hathorn, a senior market analyst at Capital.com. However, the supply environment is likely to become more normal only if the Strait of Hormuz and the East-West pipeline see substantial improvements in physical flows.
The East-West pipeline, which connects the east coast of Saudi Arabia to the Red Sea, has a capacity of 7 million barrels per day. Flows through the pipeline accounted for about 4 percent of global supply during the Iran war. The pipeline was shut following drone attacks but resumed operations on Tuesday at a reduced rate. If the pipeline and Hormuz traffic continue to recover, Brent could remain below $100 and potentially decrease further.
The US and Iran talks in New York are under close scrutiny, with both sides seeking to end the conflict and reopen the Strait of Hormuz. US President Donald Trump described the discussions as productive, stating that there is momentum for a deal. However, if the negotiations fail or another round of attacks damages Saudi infrastructure, tankers, or Gulf export capacity, oil prices could quickly surge again.
Hathorn warned that if the talks break down or shipping is disrupted once more, prices could rebound rapidly due to thin inventories and other market buffers. The Houthi rebels, who have seized key locations overlooking the Red Sea, including the port city of Mokha and Perim Island, have imposed a maritime embargo on Saudi ships and have been attacking vessels in the Bab Al Mandeb strait.
This has forced the kingdom to divert crude cargo towards the Suez Canal, taking a longer route around Africa to export oil to Asian markets.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
