Oil Falls below $100 was Supply Logistics Ease

Investors anticipated that a damaged Saudi Arabian pipeline may be close to reopening, allowing more oil from the region to reach world markets.

· Brent crude falls: Global oil prices declined on Tuesday after reports that Saudi Arabia was close to restarting its East-West pipeline, which was damaged in attacks by Iranian-backed Houthi militia.

o Brent fell more than 2% to about $98/barrel.

o It was nearly $109/barrel a week earlier.

· Pipeline restart possible this week: Saudi Arabia has reportedly been testing the 750-mile East-West pipeline, with a possible restart this week. Saudi Aramco had not commented.

· Saudi oil loadings increase sharply: Saudi crude loadings from the Persian Gulf averaged 4.3 million barrels/day over the past week—about two-thirds of pre-war exports.

o This compares with only 1.6 million bpd during the first seven days of September, before the pipeline attack.

· Possible reasons for higher loadings: Kpler analyst Matt Smith said the increase could indicate:

o Saudi Aramco expects the East-West pipeline to remain shut longer and is therefore rerouting oil through the Strait of Hormuz, or

o Saudi Arabia has greater confidence that the Strait of Hormuz can be used despite security risks.

· East-West pipeline's strategic role: The pipeline transports crude from Saudi oil fields near the Persian Gulf to Red Sea ports, allowing Saudi Arabia to bypass the Strait of Hormuz.

· Major supply risk: Kpler estimates that a one-month shutdown of the pipeline could remove about 120 million barrels of Saudi crude from global markets.

· Alternative routes complicated: Saudi Arabia could export through the Red Sea via the Bab al-Mandab Strait or through the Suez Canal/Egypt. However, the article says the Houthis now largely control the Bab al-Mandab Strait, limiting the usefulness of that alternative.

· Saudi Arabia returns to Hormuz: Because of the Red Sea security situation, Saudi Arabia is again sending more vessels through the Strait of Hormuz. The UAE's ADNOC has also continued using the waterway.

· Some improvement in Hormuz traffic: Reported attacks on vessels have decreased recently, while the U.S. Navy has maintained some oil flows through routes close to the Oman coast.

· Hormuz traffic remains severely restricted: Before the Iran war, approximately 130 vessels/day transited the Strait of Hormuz. Recently, only about 20 vessels/day have been confirmed by Kpler.

· Actual oil flows uncertain: Many tankers have switched off their navigation-tracking systems to reduce vulnerability to attacks, making the exact volume of Persian Gulf oil exports difficult to determine.

· Refined-fuel prices surge: Reduced crude flows and higher oil prices have sharply increased refined-fuel prices:

o U.S. gasoline: $4.48/gallon, up 50% since the war began.

o U.S. diesel: $6.53/gallon, up more than 70%, reaching successive records.

· Dispute over causes of diesel-price rise: President Trump has blamed Ukrainian attacks on Russian energy facilities, while analysts cited in the article say the Iran war is probably the larger factor.

· Inflationary consequences: High diesel prices are raising costs for trucks, trains and heavy machinery, creating concerns about broader inflation, higher interest rates and pressure on bond markets.

Key Oil-Market Takeaway

East-West pipeline restart → greater Saudi export flexibility → reduced immediate supply-risk premium → Brent falls to ~$98/bbl. However, with Hormuz traffic still severely curtailed and the exact oil flow difficult to measure, the global supply situation remains highly dependent on the security and availability of alternative Saudi export routes.

[ABS News Service/23.09.2026]

The global price of oil dropped on Tuesday on reports that Saudi Arabia was close to restarting a critical pipeline damaged in attacks by Iranian-backed Houthi militia over a week ago.

The price of Brent crude, the global benchmark, fell over 2 percent to about $98 a barrel, down sharply from nearly $109 a week ago.

Saudi Arabia has pushed to get more oil ready to exit the Strait of Hormuz, as its East-West pipeline has been shut since Sept. 11, when the Saudis said it was struck by Houthi militia. Bloomberg reported that the Saudis were testing the pipeline to possibly restart it this week. Saudia Aramco, the state oil giant, did not respond to a request for comment.

Over the past week, Saudi Arabia increased the volume of oil that it has loaded onto vessels in the Persian Gulf to an average of 4.3 million barrels per day, about two-thirds the volume it exported before the start of the Iran war, according to data from Kpler, a maritime tracking company. Saudi loadings from the Gulf were 1.6 million barrels a day on average for the first seven days of September, before the East-West pipeline was attacked.

The increase in crude loadings is substantial, said Matt Smith, an analyst at Kpler. He said it signaled either that Saudi Aramco officials were concerned that the East-West pipeline would be down for longer so they needed to reroute barrels through the Strait of Hormuz. Or it signaled increased confidence in being able to use the strait. The Abu Dhabi National Oil Company, the national energy company of the United Arab Emirates, has continued to use the waterway for its exports, despite the risks.

“They’re potentially jumping on that trend,” Mr. Smith said of Saudi Aramco.

The East-West pipeline, a 750-mile network that transports crude across Saudi Arabia, from oil fields near the Persian Gulf coast to ports on the Red Sea, had become the kingdom’s primary way of exporting oil since the war in Iran began. Iranian attacks in the Strait of Hormuz had limited Saudi exports through that choke point in the Persian Gulf.

An extended closure of the East-West pipeline threatened to drastically reduce how much oil Saudi Arabia, the region’s largest oil exporter, could get out of the region. Kpler estimated that a monthlong shutdown of the pipeline could result in the loss of 120 million barrels of crude for global markets.

The East-West pipeline allows Saudi oil to bypass the Strait of Hormuz entirely. Oil instead could be transported via the Red Sea, through the Bab al-Mandab Strait on the southern end of the Red Sea or via the Suez Canal and a pipeline across Egypt at the northern end of the sea, headed primarily to customers in Asia.

But with the Houthis now largely in control of the Bab al-Mandab Strait, Saudi Arabia is once again steering vessels through the Strait of Hormuz, analysts said. The U.S. Navy has been able to keep some oil flowing out of the strait on sea paths close to the coast of Oman, the side opposite from Iran. In recent days, there have also been fewer reported attacks on vessels in the Strait of Hormuz.

The restriction in oil flows and rise in crude costs have sharply driven up the prices for refined fuels. The U.S. national average price of gasoline hit $4.48 a gallon on Tuesday, up 50 percent since the start of the war, according to the AAA motor club.

The rise in diesel prices has been even steeper, setting a series of records in recent weeks. The average cost of diesel in the United States rose to $6.53 per gallon on Tuesday, up more than 70 percent since the war began.

President Trump has repeatedly blamed Ukraine’s strikes against Russian energy facilities for the rise in diesel prices, although analysts say that the Iran war is probably a bigger factor. Soaring prices for the fuel used in trucks, trains and other heavy machinery have prompted worries of a broad acceleration in inflation, driving up interest rates and upsetting bond markets.

Before the war in Iran, about 130 vessels a day moved through the Strait of Hormuz. That traffic has been greatly curtailed, with only around 20 ships per day confirmed to be passing through the waterway in recent weeks, according to Kpler. But to make themselves less vulnerable to attacks, many tankers are traveling with their navigation tracking equipment turned off, leaving the exact volume of Persian Gulf oil exports elusive.