Oil prices rose for a second straight session on Tuesday as concerns over Middle East supply disruptions continued to outweigh signs of recovering crude exports from the region.
Brent crude futures rose 63 cents or 0.6% to US$105.91 a barrel by 0002 GMT, while US West Texas Intermediate crude gained 72 cents or 0.8% to US$93.32.
Crude exports from major Middle Eastern producers climbed to 12.8 million barrels per day in September, the highest level since February, according to preliminary data from Kpler. The increase was supported by higher shipments from Saudi Arabia and the United Arab Emirates.
However, much of the additional supply is being moved through workarounds such as ship-to-ship transfers, which are less efficient and more expensive than normal operations.
“A clearer picture is emerging of higher oil export volumes leaving the Gulf, but much of that increase still relies on workarounds such as ship-to-ship transfers. Those methods are less efficient and more costly than normal operations, which is why crude prices remain elevated,” said KCM Trade chief analyst Tim Waterer.
Meanwhile, US and Iranian officials held separate discussions with mediators in renewed efforts to end the seven-month conflict. Further negotiations are expected to centre on an amended version of a seven-day proposal presented by Iran last week during the United Nations General Assembly.
“That perennial hope of a deal is arguably the main factor preventing Brent from moving sustainably above $110 in the near term,” Waterer said.
“There are competing forces, and traders are trying to separate the signal from the noise,” he added.
The conflict has kept the Strait of Hormuz firmly in focus. The crucial shipping route carries a significant share of global oil and gas supplies and disruption there has contributed to the sharp rise in energy prices.
The US is also considering regulatory relief that would allow wider sales of red-dyed diesel in an effort to lower fuel prices, according to people familiar with the discussions cited by Reuters.
The proposal has emerged as a leading alternative to a possible diesel export ban, which has been under consideration amid efforts to ease domestic fuel costs.
