Oil prices remained close to $100 a barrel on Tuesday, with steady Middle Eastern oil exports helping to ease supply concerns. However, continued attacks in the region kept traders alert to the risk of disruptions to Gulf supplies.Brent crude was trading at $100.6 a barrel, up 24 cents or 0.24%, while WTI stood at $89.60, gaining 17 cents or 0.19%.The benchmarks have eased from around $103 a barrel after shipping data showed Middle Eastern crude exports had exceeded pre-war levels on four days in the final week of September. Oil shipments held up despite attacks on vessels travelling through the Strait of Hormuz.The supply picture also improved after G7 countries agreed to release 100 million barrels of diesel and crude from emergency reserves. The group also pledged not to restrict energy exports following pressure from US President Donald Trump.But the stronger oil flows have not removed concerns about future supplies, with fresh attacks adding to uncertainty over Gulf shipments.
Houthi attacks keep Gulf supply risks alive
Yemen’s Iran-backed Houthis said on Monday that they had attacked several sites in Saudi Arabia, including King Khalid International Airport in Riyadh, an Aramco refinery in Rabigh and Abha airport. Saudi Arabia had not immediately confirmed the attacks.The attacks came as US-Iran talks remained at a stalemate, while the conflict between Saudi Arabia and Houthi forces continued to raise concerns about possible disruptions to supplies from Saudi Arabia, the region’s largest oil exporter.“Without a clear diplomatic breakthrough or a further material improvement in export efficiency, the floor under prices looks reasonably firm,” Waterer said.
Supply squeeze could last
The concerns around supply could persist well beyond the immediate crisis. Oil industry executives at a conference in London on Monday said shipping bottlenecks, deep cuts in refinery output and inventory withdrawals that could take years to replace could keep global oil prices high beyond this year.The Strait of Hormuz has been a major source of disruption since the start of the US-Israeli war on Iran at the end of February, when Iran effectively closed the waterway and choked exports through the crucial shipping route.The disruption has been compounded by attacks on oil and gas infrastructure, which have hampered production and affected exports of crude oil and refined fuels.“I think it is going to be bedlam for the bulk of the end of the year and maybe 2027,” Petronas CEO Tengku Muhammad Taufik said.Saudi Aramco chief executive Amin Nasser said it could take up to two years to rebuild global oil stockpiles that have been drawn down as an emergency measure.Speaking at the Energy Intelligence Forum in London in his first conference address since the start of the Iran war, Nasser said the scale of the stockpile withdrawals would make replenishment a long process.“Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify. Even then, replenishing inventories while meeting demand could take up to two years,” he said.Nasser said 3 billion barrels had been lost since the start of the conflict, while 1 billion barrels had been withdrawn from global inventories. The reference to both ends of the barrel covers unrefined crude as well as refined products such as diesel and jet fuel.
Demand recovery may take longer
The supply disruption could also affect the timeline for a recovery in global oil demand.ConocoPhillips Executive Chair Ryan Lance said demand could take until 2028 or 2029 to recover from this year’s decline, although he expects it to grow after that.Lance said the floor for US benchmark WTI crude would rise to around $70 a barrel, with a mid-cycle price of $65 to $70 a barrel.US oil production could exceed 14 million to 14.5 million barrels per day if prices remain strong, he said, although he did not specify what he meant by strong prices.Brent futures had traded just above $100 a barrel on Monday, while WTI was close to $90, keeping both benchmarks elevated as traders balanced stronger Middle Eastern exports against the continuing risk of supply disruptions.