Oil prices rose for a second consecutive session on Tuesday 29 September, as ongoing worries about possible supply disruptions in the Middle East, tied to the US-Israeli conflict with Iran, continued to outweigh signs of improving crude exports from the region.
By 08:44 GMT, Brent crude futures for November delivery had risen by US$0.19, or 0.2 per cent, to US$105.47 per barrel, Reuters reported.
The more actively traded December Brent contract was up by US$0.11 at US$97.94 per barrel.
US West Texas Intermediate (WTI) crude was trading at US$92.82 per barrel, an increase of US$0.22 from the previous session.
For September as a whole, the November Brent and WTI contracts are on course to record monthly gains of around 17 per cent and 8 per cent, respectively.
Preliminary data from Kpler showed that crude exports from key Middle Eastern producers reached 12.8 million barrels per day in September, the highest level since February. Saudi Arabia and the United Arab Emirates contributed to the rise.
Even so, attention remains fixed on the Strait of Hormuz, a vital route for global oil and gas supplies.
The conflict involving the US, Israel and Iran began in late February, and disruptions in the corridor have continued to affect energy markets.
US and Iranian officials say talks to resolve the dispute are continuing.
The effects of the conflict have also spread to the liquefied natural gas (LNG) market.
According to Reuters, QatarEnergy has extended force majeure notifications, preventing LNG deliveries to utilities such as Italy’s Edison and to customers in Bangladesh and Pakistan.
Edison said it does not expect to receive LNG cargoes until at least the beginning of December, continuing a notification first issued in April.
Data from ICIS indicated that Qatar’s LNG exports have fallen by 96 per cent.
Only 18 LNG shipments had been made by the end of August, compared with 509 over the same period last year.
Separately, US officials are considering regulatory changes that would allow broader sales of red-dyed diesel, according to people familiar with the discussions.
Such a move could let some buyers bypass the federal fuel tax and help bring down domestic prices.
The proposal has emerged as a leading alternative to an outright ban on diesel exports.
A recent report from TS Lombard, authored by Alexandros Xenofontos, Davide Oneglia, Rory Green and others, noted that China acted as a key buffer during the early phase of the conflict.
Electrification, inventories and some demand destruction reduced its seaborne crude imports, which helped contain the price impact of lost Gulf barrels.
That dynamic appears to be changing.
According to the report, infrastructure spending is now drawing Chinese buyers back to supplies from West Africa, Canada and Latin America, tightening physical markets more broadly.
Dated Brent is again several dollars above front-month futures, with physical North Sea crude approaching US$110 per barrel.
Traders are balancing two competing forces. Stronger Middle Eastern export volumes offer some relief, but the unresolved conflict, the continued pressure on Hormuz and the knock-on effects in LNG and refined fuel markets keep a risk premium in prices.
With physical benchmarks trading above futures and Chinese demand returning, the market appears to be tightening even as diplomatic efforts continue.
