Oil bounces as jitters around Mideast supplies persist despite signs of recovery

Oil prices turned higher on Wednesday, rebounding after a sharp fall in the previous session, as investors weighed signs of recovering Middle East exports against lingering concerns over ongoing disruptions to shipments through the Strait of Hormuz.

As of 09:24 ET (13:24 GMT), benchmark Brent crude futures expiring in November had ticked up 1.1% to $103.75 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 2.1% to $91.28 per barrel. On Tuesday, Brent settled down 2.6%, while WTI dropped 3.5%. 

The latest pressure on prices came from Saudi Arabia’s resumption of crude loadings at its Red Sea port of Yanbu after the restart of its East-West Pipeline, providing an alternative route that bypasses the Strait of Hormuz.

Saudi Aramco has notified customers of its October loading schedule, while shipping data showed nearly 10 million barrels of crude being loaded at Yanbu and nearby Al Muajjiz, according to a Reuters report.

Saudi Arabia restored flows through its East-West pipeline to at least 3.5 million barrels per day, around half of its capacity, Bloomberg reported, citing people familiar with the matter.

The recovery has reduced some of the immediate supply risk caused by the conflict, but the Strait of Hormuz remains a key uncertainty. The waterway has been effectively closed since shortly after the U.S. and Israel began their joint assault on Iran in late February, while diplomatic efforts to reopen the route have yet to produce a breakthrough.

Analysts at Deutsche Bank flagged that traders are "still pricing in a lengthier period of disruption, even as increased oil flows out of the Gulf have eased the near-term pressure."

Qatar is mediating between Washington and Tehran, with discussions focused on an agreement that could include reopening the Strait of Hormuz and easing some U.S. pressure on Iran. President Donald Trump has rejected reports that Washington offered Tehran sanctions relief, while Iran has continued to push for conditions linked to reopening the strait.

Meanwhile, a Financial Times report showed that Trump is considering a range of measures, including a possible diesel export ban, to curb surging domestic fuel prices as a worsening energy crisis raises political pressure on his administration. U.S. diesel prices reached $6.53 a gallon last week, more than 70% above their prewar level.