Oil bounces as jitters around Mideast supplies persist despite signs of recovery

Oil prices rebounded on Wednesday after a significant drop the previous day, driven by mixed signals regarding Middle East exports and persistent concerns about disruptions through the Strait of Hormuz. As of 05:06 ET (09:06 GMT), November Brent crude futures climbed 1.0% to $103.64 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 0.9% to $90.21 per barrel. On Tuesday, Brent dropped 2.6%, while WTI fell 3.5%.

The recent price surge was fueled by Saudi Arabia's resumption of crude shipments at its Red Sea port of Yanbu, following the restart of its East-West Pipeline. This new route circumvents the Strait of Hormuz and has allowed Saudi Aramco to notify customers about its October loading schedule. Shipping data revealed that nearly 10 million barrels of crude were loaded at Yanbu and nearby Al Muajjiz, indicating a gradual recovery in Middle East exports.

Despite this progress, the Strait of Hormuz remains a critical source of uncertainty. The waterway has effectively been closed since the U.S. and Israel launched a joint assault on Iran in late February. Diplomatic efforts to reopen the route have thus far failed to achieve a breakthrough. Analysts at Deutsche Bank noted that traders are still factoring in a prolonged period of disruption, even as increased oil flows from the Gulf have alleviated near-term pressure.

Qatar is currently acting as a mediator between the United States and Iran, with discussions centered around an agreement that could potentially reopen the Strait of Hormuz and reduce U.S. pressure on Iran. However, President Donald Trump has dismissed reports of any sanctions relief being offered to Tehran, while Iran continues to demand conditions linked to the reopening of the strait.

Meanwhile, the Financial Times reported that Trump is exploring various options, including a potential diesel export ban, to address surging domestic fuel prices. As the energy crisis intensifies, these measures are likely to face political pressure on the administration. U.S. diesel prices had reached $6.53 a gallon last week, more than 70% higher than their pre-war levels.