WTI remains below $90.00 due to Middle East export recovery

WTI oil prices have dipped to below $90.00 per barrel following a major recovery in Middle East exports. The benchmark crude dropped nearly 4.5% in the previous day, settling around $88.50 in Asian trading hours on Wednesday. This decline comes as energy flows from the Middle East indicate a notable improvement. Analysts point to the 10-day average of crude exports from the region recovering to 17.5 million barrels per day, which is now at 98% of pre-war levels.

This positive trend is attributed to Saudi Arabia resuming crude exports through its East-West pipeline at around half its capacity, coupled with continuous covert shipping through the Strait of Hormuz. Additionally, a significant release of emergency reserves in the US has helped ease lingering supply concerns. The US government plans to draw from the Strategic Petroleum Reserve (SPR) for up to 40 million barrels to counter escalating fuel costs.

Despite these developments, the US oil benchmark is expected to achieve a third straight monthly increase. Geopolitical factors, particularly the ongoing US-Iran conflict and disputes over the Strait of Hormuz, continue to weigh on prices. Strategists at Scotiabank emphasize that the market's primary focus remains on oil prices, with the latest gains driven by "the renewed deterioration in US/Iran negotiations and President Trump's rejection of Iran's recent proposal to reopen the Strait of Hormuz."

WTI, or West Texas Intermediate, is a high-quality crude oil sold on international markets, sourced in the United States and refined easily. Its prices are heavily influenced by global supply and demand dynamics, OPEC production decisions, and the value of the US Dollar.