Oil prices rose Wednesday after US President Donald Trump rejected reports that Washington was considering sanctions relief for Iran.
Brent crude futures rose $1.14, or 1.11%, to $103.73 a barrel. US West Texas Intermediate crude gained 34 cents, or 0.38%, to $89.72.
The gains came a day after oil prices fell as crude flows from the Middle East showed signs of recovering toward pre-war levels.
Brent is now headed for a monthly gain of roughly 14%, its biggest monthly increase since July.
WTI is on track for a roughly 4% gain after briefly climbing above $106 a barrel for the first time since May.
Trump denies Iran sanctions relief
Geopolitical developments remained a key driver of prices after Trump rejected an Axios report that said he was willing to provide Iran with sanctions relief and release frozen Iranian funds in exchange for concrete steps on Tehran’s nuclear program.
“This is untrue. I offered them NOTHING,” Trump wrote on Truth Social.
Qatar, meanwhile, said Tuesday that it hoped its shuttle diplomacy between Washington and Tehran could produce progress toward a deal.
“We are exchanging messages between the parties, and we’re working towards establishing a common ground in order to get into a deal that would save all of us from the repercussions of the conflict,” Qatari Foreign Ministry spokesperson Majed al-Ansari told reporters.
The conflicting signals leave the outlook for the conflict and its impact on oil supplies uncertain.
The spread between Brent and WTI has also widened to its highest level in four months.
Traders are watching potential US restrictions on diesel exports, which could create an oversupply in the domestic market and encourage US refiners to process less crude.
Trump is also considering allowing sales of red-dyed diesel rather than imposing an export ban, potentially offering some relief to consumers ahead of November’s midterm elections.
Middle East oil flows recover
At the same time, physical oil flows from the Middle East have recovered substantially despite the ongoing conflict.
Saudi Arabia resumed oil tanker loadings from its Red Sea port of Yanbu on Tuesday after restarting operations on its East-West Pipeline.
Middle East crude exports rose to 16.328 million barrels per day in September, the highest level since the US-Israeli war with Iran began in late February.
Separate estimates from JPMorgan and Goldman Sachs also point to a substantial recovery in regional oil flows.
JPMorgan analysts, including Natasha Kaneva, said in a September 29 note that the region’s “oil export arteries are flowing again.”
The bank estimated crude shipments had recovered to 17.5 million barrels per day, or 98% of pre-war levels.
Product flows, including diesel and gasoline, were around 3 million barrels per day, equivalent to 58% of pre-war levels.
The overall flow was estimated at 89% of 2025 levels based on a 10-day average over the past five days.
JPMorgan said flows through the Strait of Hormuz had almost returned to late-June highs of nearly 13 million barrels per day, led primarily by Saudi Arabia.
The recovery, however, has not eliminated the risks surrounding regional shipping.
“Higher crossings should not be mistaken for improved safety — rather, they reflect the industry’s increasing ability to operate under sustained risk,” JPMorgan analysts said.
Oil market moves closer to balance
Goldman Sachs also found that oil exports from the Persian Gulf, including so-called dark flows moved clandestinely, had recovered to 23.3 million barrels per day over the past week.
That level is broadly in line with the 2025 average.
“We estimate that the global oil market is roughly balanced in September,” Goldman analysts, including Yulia Zhestkova Grigsby, said in a September 29 note.
The improving supply picture has helped limit the impact of the conflict on global oil availability, even as geopolitical uncertainty continues to support prices.
US crude oil and gasoline inventories also rose last week, while distillate stocks declined, according to market sources citing American Petroleum Institute data.
The key tension for the oil market is therefore becoming clearer: physical supply has recovered sharply toward pre-war levels, but the geopolitical risk surrounding those flows remains elevated.
For now, the prospect of further diplomatic progress is competing with uncertainty over sanctions, shipping security and the durability of the recovery in regional exports.
That leaves oil prices highly sensitive to any change in the trajectory of US-Iran negotiations.
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