Oil prices retreated more than 2% on Wednesday after fresh data indicated that crude shipments from Gulf producers had recovered to prewar levels, although persistent attacks on commercial vessels continued to threaten the stability of energy supplies.
Brent crude futures, which had climbed above $111 a barrel early in the morning, fell to $108.2 by 9:30 AM ET, down more than 2% from the day’s peak. West Texas Intermediate (WTI) crude also reversed course, dropping from above $100 to around $97.
The pullback came as traders weighed improving export volumes against escalating security risks around the Strait of Hormuz, one of the most important routes for global oil shipments.
Gulf exports recover
Preliminary data from analytics firm Kpler showed that oil shipments from Gulf producers, excluding Iran, averaged 24.6 million barrels per day last week.
That exceeded the prewar average of 23.3 million barrels per day recorded before the United States launched its offensive against Iran.
The Wall Street Journal reported that an improvised shipping arrangement operating under US protection was helping tankers transport oil despite continuing threats to the critical waterway.
However, the broader recovery in exports has not translated into a full restoration of normal shipping conditions.
Attacks on commercial vessels have increased. The UK Maritime Trade Operations recorded 28 incidents involving vessels during October, compared with 18 in September.
Iran has continued attacking ships attempting to cross the strait.
The security situation has forced shipping operators to navigate increasingly difficult passage conditions, while insurance premiums and transportation costs have risen sharply.
Ship captains have reportedly sought payments of as much as $1 million for transits.
Saudi Arabia turns to alternative routes
Saudi Arabia has sought to maintain crude exports by redirecting more shipments through its Red Sea port of Yanbu, reducing its reliance on the Strait of Hormuz.
August exports from the world’s largest oil exporter reached their highest level since March, providing an alternative route for crude shipments while Gulf shipping remains exposed to attacks.
However, the conflict between Saudi Arabia and Yemen’s Houthi movement continues to pose another threat to regional energy infrastructure.
The Houthis have claimed attacks on key Saudi energy facilities, adding another source of uncertainty alongside the confrontation between Washington and Tehran.
Conflicting reports add to price swings
Oil prices have been particularly volatile since the war began as traders react to reports about the possibility of a diplomatic breakthrough between the United States and Iran.
On Tuesday, Brent crude fell to $106.33 after Qatari media reported that Washington and Tehran had responded positively to a Qatar-backed proposal aimed at easing tensions.
Subsequent reports disputed the earlier account, prompting crude prices to recover above $108.
Prices were on the up again before positive data from the Middle East helped investor sentiment.
The post Oil prices fall as Gulf exports recover to prewar levels despite Hormuz risks appeared first on Invezz