Oil prices experienced an increase for the second consecutive day on Tuesday, driven by ongoing concerns regarding potential supply disruptions in the Middle East linked to the US-Iran conflict. This sentiment outweighed indications of recovering crude exports from the area.
By 0326 GMT, Brent crude futures had climbed by $1.49, or 1.4%, reaching $106.77 per barrel, while US West Texas Intermediate crude saw an increase of $1.34, or 1.5%, settling at $93.94. Both benchmarks had concluded the previous trading session with nearly a $1 increase per barrel.
According to Tim Waterer, chief analyst at KCM Trade, “A clearer picture is emerging regarding increased oil export volumes departing from the Gulf, yet much of this rise is dependent on alternative methods such as ship-to-ship transfers. These approaches are less efficient and more expensive than standard operations, which is contributing to the sustained high crude prices.”
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Preliminary data from Kpler indicated that crude exports from significant Middle Eastern producers surged to 12.8 million barrels per day in September, marking the highest levels since February, bolstered by enhanced shipments from Saudi Arabia and the United Arab Emirates.
Separately, US and Iranian officials have engaged with intermediaries in renewed discussions aimed at resolving a seven-month conflict, according to representatives from both nations. Anticipated future talks are likely to concentrate on a revised proposal presented by Iran last week during the United Nations General Assembly.
Analysts at UOB noted in a client communication, “The primary concern continues to be the tensions between the US and Iran and their potential repercussions on energy prices and inflation.” They further reported that Iranian officials have voiced skepticism regarding the likelihood of reaching a deal before tensions in the Strait of Hormuz escalate, leaving oil supply uncertainties high.
The ongoing conflict, which began in late February following US and Israeli strikes on Iran, has intensified focus on the Strait of Hormuz, a vital shipping route for oil and gas supplies. Disruptions in this area have significantly impacted energy markets.
In related developments, the US government is contemplating regulatory measures to permit wider sales of red-dyed diesel, potentially reducing prices. This initiative could enable certain buyers to bypass federal fuel taxes, as reported by sources familiar with the discussions. The proposal has emerged as a leading alternative to a ban on diesel exports after several days of deliberation.
Financial Chronicle Biz English | Sri Lanka Business News.
