Oil prices fell sharply on Tuesday as fresh shipping data showed crude exports from the Middle East recovering despite the ongoing conflict with Iran. By midmorning, Brent crude futures were around $100.17 a barrel, while U.S. West Texas Intermediate traded near $88.67. Later in the session, December Brent futures dropped roughly 2.6% to $97.73, and WTI slid to about $86.64, pushing Brent back below the psychologically important $100 level.
The decline followed data from Kpler and Vortexa indicating that Gulf producers have rerouted barrels through alternative pipelines and terminals and are relying more heavily on ship-to-ship transfers. Combined crude, condensate and refined-product exports from Gulf producers excluding Iran averaged 19.2 million barrels per day in September, equivalent to more than 81% of pre-war levels. Crude and condensate flows recovered to about 91% of pre-war levels. The seven-day moving average for exports reached 18.3 million barrels per day by September 30, and on 14 days in September total export volumes exceeded pre-war levels.
Saudi Arabia drove much of the improvement: its crude exports jumped by roughly 4.2 million barrels per day from August to 6.6 million barrels per day. Traffic through the Strait of Hormuz has also rebounded, with Persian Gulf crude exports surpassing 14 million barrels per day last week for the first time since the Iran war began on February 28, more than 210% above the low of about 4.5 million barrels per day.
Still, the recovery is uneven and risks remain. Refined-product exports are running at only about 60% of pre-war levels, keeping gasoline, diesel and jet fuel tight. Saudi Aramco reportedly still describes global inventories as “scarily thin.” The conflict has spread to Yemen, where Iran-backed Houthi fighters and Saudi-aligned forces are fighting for control of the Bab el Mandeb Strait, and Saudi Arabia’s east-west pipeline was targeted again on Monday, though it was not damaged.
The G7 has pledged to release 100 million barrels of emergency crude and diesel and agreed not to restrict energy exports, a decision that followed pressure from President Donald Trump. Central banks are watching energy prices closely because elevated fuel costs can push inflation higher and influence interest-rate decisions. The drop in crude prices could ease some of that pressure, but tight refined-product markets remain a concern.
