According to Reuters, the pipeline initially restarted at a reduced rate. Saudi Arabia was also preparing to resume crude shipments from Yanbu, a Red Sea port that had stopped loading oil after the attacks. One cargo was reportedly expected to head toward China.
The pipeline has considerable importance for the global market. Before the latest disruption, Saudi Arabia could move roughly 4 million barrels of crude per day through the East-West system toward Yanbu, representing approximately 4% of global oil supply. The full system’s capacity is higher, but restoring normal operations could take time because damage was reported at pumping facilities.
Saudi Arabia has also increased crude shipments through the Strait of Hormuz during the disruption. Tanker-tracking information showed that Saudi Aramco loaded approximately 14 million barrels aboard seven supertankers at Gulf terminals over the weekend, another indication that crude was continuing to move despite the regional turmoil.
Then came a potentially significant signal from Tehran.
A senior Iranian official told Reuters that Iran could reopen the Strait of Hormuz within seven days if the United States reduces military pressure and lifts its blockade of Iranian ports. The official also said Iran’s delegation in New York had authority to resume diplomatic discussions with Washington.
The Strait is one of the world’s most important energy chokepoints. Before the current war began in late February, approximately one-fifth of global oil and liquefied natural gas supplies moved through the waterway. Any sustained disruption therefore has consequences far beyond the Persian Gulf.
Oil prices reflected the changing outlook.
During Tuesday morning trading, November Brent crude futures fell $2.11, or 2.1%, to $98.23 per barrel. October West Texas Intermediate futures, which were approaching expiration, dropped $2.48, or 2.59%, to $93.30. The more actively traded November WTI contract declined $2.36, or 2.55%, to $90.01.
All three contracts touched two-week lows during the trading session. By the close, Reuters reported further declines, with Brent settling below the $100 mark as markets absorbed the improving supply outlook.
But cheaper crude does not necessarily mean the broader fuel crisis is over.
Oil-market analysts have warned that significant problems remain, particularly in refined petroleum products. Europe and the United States have experienced severe diesel shortages, while disruptions involving major producers and exporters have tightened available supplies.
Ole Hansen, head of commodity strategy at Saxo Bank, said the downside for crude prices could remain limited until substantially more petroleum actually makes its way through Hormuz. Refined products are an especially important concern because shortages in that market can persist even when crude prices begin falling.
The situation also extends beyond the Middle East. The wars involving Iran and Ukraine have disrupted international energy flows, affecting exports from major producers and adding further pressure to diesel markets in both Europe and the United States.
Hamad Hussain, senior climate and commodities economist at Capital Economics, said Iran’s statement could indicate that diplomatic channels are beginning to produce movement, although he cautioned that significant obstacles could remain.
“There may also be other obstacles, such as the issue of tolls and fees, to overcome before a lasting solution can be achieved,” Hussain added.
For now, traders remain focused on whether the recent developments translate into actual additional barrels reaching the global market.
Saudi Arabia’s pipeline restart provides one tangible source of relief, but the system is not yet operating at full capacity. Iran’s Hormuz proposal is also conditional, meaning the waterway’s future status depends on developments between Tehran and Washington.
That leaves the oil market highly sensitive to every diplomatic and military development.
With world leaders gathered in New York and negotiations potentially taking shape, energy traders are watching closely for evidence that the latest signals will produce a sustained increase in oil flows—or whether renewed tensions could quickly reverse Tuesday’s decline.
