1 hr ago
Oil Prices Fall as Saudi Pipeline Restarts, US-Iran Talks
Oil became slightly cheaper because traders expected more crude to reach buyers.
Saudi Arabia restarted an important pipeline that sends oil to the Red Sea.
The pipeline is not yet working at its full speed because drone attacks damaged pumping stations.
The pipeline had been carrying about 4 million barrels of oil each day.
People also heard that the United States and Iran might hold talks.
If those talks help reopen the Strait of Hormuz, more oil could move through the region.
Iraq is also sending more oil to international markets.
In the United States, oil inventories rose instead of falling, which also put pressure on prices.
Brent crude fell 48 cents, or 0.48 percent, to $98.77 a barrel, slipping below $100 for a second day.
Saudi Arabia resumed flows through its East-West Pipeline after drone attacks damaged three pumping stations earlier this month.
The pipeline was rerouting about 4 million barrels per day, but it restarted at a reduced rate and may take weeks to regain full capacity.
Hopes for US-Iran diplomatic talks and a possible reopening of the Strait of Hormuz eased fears of a prolonged supply disruption.
Iraq reported rising exports, while US industry data showed crude inventories increased by 1.8 million barrels in the week ending September 18.
- Who
- Oil traders, Saudi Arabia, the United States, Iran, and Iraq are central to the developments.
- What
- Oil prices fell as Saudi Arabia restarted a key pipeline, US-Iran talks raised hopes of easing disruptions, and additional Iraqi supply emerged.
- Where
- The developments involve Saudi Arabia’s East-West Pipeline, the Red Sea port of Yanbu, the Strait of Hormuz, Iraq, and the United States.
- When
- Prices were lower on Wednesday; the Saudi pipeline restarted Tuesday, and US inventory data covered the week ending September 18.
- Why
- Markets anticipated improved oil availability from restored Saudi flows, possible diplomatic progress between Washington and Tehran, higher Iraqi exports, and increased US inventories.
Key facts
- Brent price
- $98.77 a barrel, down 48 cents or 0.48 percent at 8:25 am
- Saudi pipeline
- East-West Pipeline, linking eastern oil-producing areas with Yanbu on the Red Sea
- Rerouted Saudi crude
- About 4 million barrels per day, roughly 4 percent of global oil supply
- Pipeline capacity
- Maximum capacity of about 7 million barrels per day
- Iraqi exports
- More than 3 million barrels per day, with exports through Turkey expected to exceed 600,000 barrels per day
- US inventories
- Industry data showed a 1.8-million-barrel increase for the week ending September 18
- Pipeline damage
- Three pumping stations were damaged in drone attacks, and full restoration could take several weeks
Sources
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